VYM vs XLV: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard High Dividend Yield ETF (VYM) and Health Care Select Sector SPDR Fund (XLV) carry a correlation of 0.57, a moderate link. By holdings, the two funds overlap 13.0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VYM and XLV?
On 3 years of weekly data the VYM/XLV correlation comes out at 0.57, moderate. The link has loosened recently: the 1-year correlation (0.36) runs below the 3-year figure (0.57). The 5-year figure is 0.65, and annualized covariance runs at 102.2 %².
By 3-year correlation, XLV places #84 of the 122 assets tracked against VYM. Over the last 12 months XLV came out ahead by 6.4 percentage points (+21.1% against +27.5%). The rolling one-year correlation moved between 0.41 and 0.78 over the past three years, a moderate range.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
VYM vs XLV: side by side
| VYM (Vanguard High Dividend Yield ETF) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.1% | +27.5% |
| 5-year return | +76.6% | +37.4% |
| Volatility (ann.) | 12.3% | 14.7% |
| Beta vs S&P 500 | 0.69 | 0.42 |
| Max drawdown (3Y) | -14.5% | -17.1% |
| Dividend yield | 2.24% | 1.56% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $99.2B | $41.7B |
| Sector / category | ETF · Dividend | Sector ETF |
VYM is a Large Value fund from Vanguard: $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield. On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Portfolio overlap between VYM and XLV
The two portfolios are largely distinct. Weighing the shared positions, 13.0% of the two funds is identical, spread across 20 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VYM | Weight in XLV |
|---|---|---|
| JNJ | 2.51% | 10.38% |
| ABBV | 1.81% | 7.42% |
| UNH | 1.52% | 5.82% |
| MRK | 1.31% | 6.04% |
| AMGN | 0.78% | 3.80% |
| ABT | 0.75% | 3.17% |
| GILD | 0.66% | 2.94% |
| PFE | 0.58% | 2.58% |
| CVS | 0.55% | 1.92% |
| BMY | 0.54% | 2.20% |
| MDT | 0.45% | 1.89% |
| ELV | 0.32% | 1.40% |
| CI | 0.30% | 1.19% |
| CAH | 0.22% | 0.89% |
| BDX | 0.19% | 0.84% |
Largest positions held only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), CSCO (1.87%), BAC (1.67%). Only by XLV: LLY (15.03%), TMO (3.76%), VRTX (2.22%), DHR (2.17%), ISRG (2.10%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 15 common positions shown.
Year-by-year returns
| Year | VYM | XLV |
|---|---|---|
| 2022 | -0.4% | -2.1% |
| 2023 | +6.6% | +2.1% |
| 2024 | +17.6% | +2.5% |
| 2025 | +15.4% | +14.5% |
| 2026 | +15.9% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VYM and XLV good diversifiers for each other?
Only partially. A correlation of 0.57 means VYM and XLV share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between VYM and XLV?
As of 2026-08-27, the correlation of weekly returns between VYM and XLV is 0.57 over 3 years, 0.36 over 1 year and 0.65 over 5 years.
Is XLV a good diversifier for VYM?
Only partially. A correlation of 0.57 means VYM and XLV share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VYM and XLV overlap?
13.0% by weight, across 20 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
Use this data
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Hubs: VYM correlations · XLV correlations
