XLB vs XLU: Correlation & Overlap
Measured on weekly returns over the past three years, Materials Select Sector SPDR Fund (XLB) and Utilities Select Sector SPDR Fund (XLU) carry a correlation of 0.44, a moderate link. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLB and XLU?
Over the past 3 years, XLB and XLU moved with a correlation of 0.44, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.30 versus 0.44 over 3 years. Over 5 years the correlation is 0.48, and the annualized covariance of weekly returns is 116.7 %².
Within XLB's tracked universe of 140 assets, XLU comes in at #121 by 3-year correlation. Over the last 12 months XLB came out ahead by 13.5 percentage points (+17.6% against +4.1%). Across three years, the rolling one-year figure varied moderately, from 0.29 to 0.65.
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.
XLB vs XLU: side by side
| XLB (Materials Select Sector SPDR Fund) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.6% | +4.1% |
| 5-year return | +36.9% | +46.3% |
| Volatility (ann.) | 16.7% | 15.8% |
| Beta vs S&P 500 | 0.72 | 0.26 |
| Max drawdown (3Y) | -23.2% | -13.1% |
| Dividend yield | 1.68% | 2.70% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $8.3B | $23.1B |
| Sector / category | Sector ETF | Sector ETF |
XLB, State Street Investment Management's Natural Resources fund, carries $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between XLB and XLU
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%). Only by XLU: NEE (12.94%), SO (7.45%), DUK (7.00%), CEG (6.58%), AEP (4.94%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | XLB | XLU |
|---|---|---|
| 2022 | -12.3% | +1.4% |
| 2023 | +12.5% | -7.2% |
| 2024 | +0.1% | +23.3% |
| 2025 | +9.9% | +16.0% |
| 2026 | +18.3% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLB and XLU good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.44 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between XLB and XLU?
As of 2026-08-27, the correlation of weekly returns between XLB and XLU is 0.44 over 3 years, 0.30 over 1 year and 0.48 over 5 years.
Is XLU a good diversifier for XLB?
Yes, to a useful degree: a correlation of 0.44 leaves real independence between the two, which historically damped combined volatility.
How much do XLB and XLU overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/xlb-vs-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/xlb-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: XLB correlations · XLU correlations
