# Which ETFs diversify a portfolio of VOO 60% and QQQ 40% the most?

Over the 156 weeks to 2026-10-13, among 29 large US ETFs, the bond ETF with the lowest weekly correlation with VOO 60% and QQQ 40% was SHY, at 0.01, the sector stock ETF XLE, at 0.10, and the commodity ETF GLD, at 0.14.

Correlation measures how two ETFs move together: 1 means always together, 0 means no link, below 0 means opposite.

Measurement, not investment advice.

## What are the top 3 ETFs that diversify the portfolio most?

### [SHY](https://tickerinside.com/etf/shy/), iShares 1-3 Year Treasury Bond ETF (Bonds)

- Correlation with the portfolio: 0.01. Moved almost independently of the portfolio.
- In the portfolio's 63 down weeks: -0.31, it tended to move the other way.
- With 10% in it, the portfolio's volatility would have been 14.4% instead of 16.0%.

### [XLE](https://tickerinside.com/etf/xle/), Energy Select Sector SPDR Fund (Sector stocks)

- Correlation with the portfolio: 0.10. Moved almost independently of the portfolio.
- In the portfolio's 63 down weeks: 0.65, it moved mostly with it.
- With 10% in it, the portfolio's volatility would have been 14.8% instead of 16.0%.

### [GLD](https://tickerinside.com/etf/gld/), SPDR Gold Shares (Commodities)

- Correlation with the portfolio: 0.14. Moved almost independently of the portfolio.
- In the portfolio's 63 down weeks: 0.21, it moved partly with it.
- With 10% in it, the portfolio's volatility would have been 14.8% instead of 16.0%.

Weekly returns over the 156 weeks to 2026-10-13; down weeks are the 63 weeks the portfolio's weekly return was below zero. QQQ is in the list and held, so it is left out. Overlap by weight from the issuer files of 2026-08-31 to 2026-10-13.

## How did $100 grow in the portfolio, SHY, XLE and GLD?

$100 in the portfolio became $201 over the 156 weeks from 2023-10-20 to 2026-10-13; in SHY $112, in XLE $161 and in GLD $208. Each line compounds the weekly returns the correlations are measured on.

## How do the other 26 ETFs of the list compare?

The top 3 take one ETF per group; the others follow from 4, lowest correlation first.

| # | ETF | Group | Correlation | On down weeks |
|---:|---|---|---:|---:|
| 4 | [IEF](https://tickerinside.com/etf/ief/), iShares 7-10 Year Treasury Bond ETF | Bonds | 0.04 | -0.34 |
| 5 | [TLT](https://tickerinside.com/etf/tlt/), iShares 20+ Year Treasury Bond ETF | Bonds | 0.07 | -0.32 |
| 6 | [BND](https://tickerinside.com/etf/bnd/), Vanguard Total Bond Market ETF | Bonds | 0.13 | -0.28 |
| 7 | [TIP](https://tickerinside.com/etf/tip/), iShares TIPS Bond ETF | Bonds | 0.15 | -0.13 |
| 8 | [XLU](https://tickerinside.com/etf/xlu/), Utilities Select Sector SPDR Fund | Sector stocks | 0.16 | 0.15 |
| 9 | [XLP](https://tickerinside.com/etf/xlp/), Consumer Staples Select Sector SPDR Fund | Sector stocks | 0.23 | 0.10 |
| 10 | [LQD](https://tickerinside.com/etf/lqd/), iShares iBoxx Investment Grade Corporate Bond ETF | Bonds | 0.26 | -0.20 |
| 11 | [XLV](https://tickerinside.com/etf/xlv/), Health Care Select Sector SPDR Fund | Sector stocks | 0.33 | 0.21 |
| 12 | [IGF](https://tickerinside.com/etf/igf/), iShares Global Infrastructure ETF | Sector stocks | 0.40 | 0.28 |
| 13 | [VNQ](https://tickerinside.com/etf/vnq/), Vanguard Real Estate ETF | Sector stocks | 0.41 | 0.31 |
| 14 | [SCHD](https://tickerinside.com/etf/schd/), Schwab US Dividend Equity ETF | US stocks | 0.49 | 0.52 |
| 15 | [VNQI](https://tickerinside.com/etf/vnqi/), Vanguard Global ex-U.S. Real Estate ETF | Sector stocks | 0.52 | 0.24 |
| 16 | [AVUV](https://tickerinside.com/etf/avuv/), Avantis U.S. Small Cap Value ETF | US stocks | 0.59 | 0.53 |
| 17 | HYG, iShares iBoxx High Yield Corporate Bond ETF | Bonds | 0.63 | 0.39 |
| 18 | [AVDV](https://tickerinside.com/etf/avdv/), Avantis International Small Cap Value ETF | International stocks | 0.65 | 0.60 |
| 19 | [USMV](https://tickerinside.com/etf/usmv/), iShares MSCI USA Min Vol Factor ETF | US stocks | 0.66 | 0.53 |
| 20 | [VWO](https://tickerinside.com/etf/vwo/), Vanguard FTSE Emerging Markets ETF | Emerging market stocks | 0.71 | 0.53 |
| 21 | [VTV](https://tickerinside.com/etf/vtv/), Vanguard Value ETF | US stocks | 0.71 | 0.61 |
| 22 | [VEA](https://tickerinside.com/etf/vea/), Vanguard FTSE Developed Markets ETF | International stocks | 0.72 | 0.57 |
| 23 | [IWM](https://tickerinside.com/etf/iwm/), iShares Russell 2000 ETF | US stocks | 0.73 | 0.61 |
| 24 | [VXUS](https://tickerinside.com/etf/vxus/), Vanguard Total International Stock ETF | International stocks | 0.75 | 0.58 |
| 25 | [RSP](https://tickerinside.com/etf/rsp/), Invesco S&P 500 Equal Weight ETF | US stocks | 0.77 | 0.67 |
| 26 | [VO](https://tickerinside.com/etf/vo/), Vanguard Mid-Cap ETF | US stocks | 0.81 | 0.72 |
| 27 | [MTUM](https://tickerinside.com/etf/mtum/), iShares MSCI USA Momentum Factor ETF | US stocks | 0.89 | 0.81 |
| 28 | [QUAL](https://tickerinside.com/etf/qual/), iShares MSCI USA Quality Factor ETF | US stocks | 0.95 | 0.86 |
| 29 | [VTI](https://tickerinside.com/etf/vti/), Vanguard Total Stock Market ETF | US stocks | 0.98 | 0.95 |

## How much do SHY, XLE and GLD overlap with VOO 60% and QQQ 40%, and how volatile were they?

Overlap: the weight each ETF holds in companies VOO 60% and QQQ 40% also hold, counted at the smaller weight; the lower, the less it repeats what you hold. Volatility: how much the weekly returns varied, annualised.

| ETF | Group | Weekly correlation, 156 weeks to 2026-10-13 | On down weeks, 63 weeks | Overlap by weight | Volatility, annualised |
|---|---|---:|---:|---:|---:|
| [SHY](https://tickerinside.com/etf/shy/), iShares 1-3 Year Treasury Bond ETF | Bonds | 0.01 | -0.31 | Holds bonds | 1.6% |
| [XLE](https://tickerinside.com/etf/xle/), Energy Select Sector SPDR Fund | Sector stocks | 0.10 | 0.65 | 2.3% | 22.9% |
| [GLD](https://tickerinside.com/etf/gld/), SPDR Gold Shares | Commodities | 0.14 | 0.21 | Holds gold | 18.6% |
| VOO, QQQ, your ETFs at your weights | | | | | 16.0% |

- With 10% in SHY and 90% in VOO and QQQ at their weights, the portfolio's annualised weekly volatility over the 156 weeks to 2026-10-13 would have been 14.4% instead of 16.0%.
- With 10% in XLE and 90% in VOO and QQQ at their weights, the portfolio's annualised weekly volatility over the 156 weeks to 2026-10-13 would have been 14.8% instead of 16.0%.
- With 10% in GLD and 90% in VOO and QQQ at their weights, the portfolio's annualised weekly volatility over the 156 weeks to 2026-10-13 would have been 14.8% instead of 16.0%.

## What do SHY, XLE and GLD hold, next to your portfolio?

Each ETF's weight in mega-cap tech, its largest sector or asset and its largest country outside the US.

| ETF | Holdings file | Mega-cap tech | Largest sector or asset | Largest outside the US |
|---|---|---:|---|---|
| SHY | SEC Form N-PORT, 2026-05-31 | None | US Treasury notes and bonds 99.0% (Money market funds 1.8%) | Not measured |
| XLE | Issuer file, 2026-10-13 | 0.0% | Energy 99.8% | None, 99.8% US |
| GLD | Trust's own SEC filing, 2026-06-30 | None | Gold 100.0% | Not measured |
| Your portfolio, VOO 60% and QQQ 40% | 100% looked through | 38.2% | Technology 46.2% | Netherlands 0.5% |

SHY holds US Treasury notes and bonds (99.0%) and money market funds (1.8%) of its net assets, by its Form N-PORT filing of 2026-05-31. GLD holds gold (100.0%) of its net assets, by its own SEC filing of 2026-06-30.

## Questions and answers

**Which ETF in each group of the list had the lowest weekly correlation with VOO 60% and QQQ 40%?**
SHY 0.01 (bonds), XLE 0.10 (sector stocks), GLD 0.14 (commodities), SCHD 0.49 (US stocks), AVDV 0.65 (international stocks) and VWO 0.71 (emerging market stocks), over the 156 weeks to 2026-10-13, among 29 large US ETFs.

**How did SHY, XLE and GLD move on the weeks the portfolio fell?**
On the 63 weeks the portfolio fell, of the 156 to 2026-10-13, their weekly correlation with VOO 60% and QQQ 40% was -0.31 for SHY, 0.65 for XLE and 0.21 for GLD.

**How would 10% in SHY, XLE or GLD have changed the volatility of VOO 60% and QQQ 40%?**
Over the 156 weeks to 2026-10-13, the annualised weekly volatility of VOO 60% and QQQ 40% was 16.0%; with 10% in SHY it would have been 14.4%, in XLE 14.8%, and in GLD 14.8%.

**How much of XLE is in companies VOO 60% and QQQ 40% also hold?**
100.0% of XLE's weight is in 21 holdings VOO 60% and QQQ 40% also hold (by ticker); counted at the smaller of the two weights, the overlap is 2.3%. XOM, CVX and BKR account for 0.61, 0.35 and 0.15 points of it. XLE holdings of 2026-10-13.

## The list and the rule

Chosen on 2026-10-10: 30 large US ETFs across six kinds of exposure, one ETF per exposure, the same list for every portfolio.

- US stocks: VTI, RSP, QQQ, VTV, SCHD, VO, IWM, AVUV, USMV, QUAL, MTUM
- Sector stocks: XLU, XLP, XLV, XLE, VNQ, VNQI, IGF
- International stocks: VXUS, VEA, AVDV
- Emerging market stocks: VWO
- Bonds: BND, SHY, IEF, TLT, TIP, LQD, HYG
- Commodities: GLD

From the ETFs of the list, leaving out any ETF the portfolio holds: in each group, the ETF whose weekly returns had the lowest correlation with the portfolio's over the weeks both have, up to 156, compared before rounding; the answer opens on the 3 groups whose lowest is lowest, and an exact tie keeps the order of the list.

Left out on purpose: S&P 500 ETFs weighted by company size, near duplicates of VTI; sector ETFs for technology, financials, industrials, consumer discretionary, communication services and materials; Treasury bills; single commodities other than gold; gold miners; bitcoin; and leveraged, inverse and volatility products.

How each figure is measured, and the order of the table: https://tickerinside.com/how-the-numbers-are-produced/#diversify

Share this answer: https://tickerinside.com/diversify/?have=VOO:60,QQQ:40
JSON: https://tickerinside.com/api/v1/diversify?have=VOO:60,QQQ:40
The list: https://tickerinside.com/api/v1/diversify/candidates.json
Sources: VOO https://tickerinside.com/etf/voo/, QQQ https://tickerinside.com/etf/qqq/, SHY https://tickerinside.com/etf/shy/, XLE https://tickerinside.com/etf/xle/, GLD https://tickerinside.com/etf/gld/.
Measurement, not investment advice. CC BY 4.0, cite as: TickerInside (tickerinside.com), Does it diversify me?, https://tickerinside.com/diversify/?have=VOO:60,QQQ:40, from the ETFs' weekly prices and holdings files, dated as shown.
Canonical page: https://tickerinside.com/diversify/