ACWI vs XLK: Correlation & Overlap
iShares MSCI ACWI ETF (ACWI) and Technology Select Sector SPDR Fund (XLK) show a very strong relationship: their 3-year correlation of weekly returns is 0.86. The two funds also share 22.8% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ACWI and XLK?
On 3 years of weekly data the ACWI/XLK correlation comes out at 0.86, very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.82 lands near the 3-year figure. The 5-year figure is 0.87, and annualized covariance runs at 284.9 %².
Within ACWI's tracked universe of 119 assets, XLK comes in at #27 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLK outperformed by 20.7 percentage points (+22.7% for ACWI against +43.4% for XLK). The rolling one-year correlation stayed in a tight band between 0.75 and 0.94 over the past three years, which points to a structural rather than episodic relationship. Note the risk asymmetry: XLK runs 1.7 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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.
ACWI vs XLK: side by side
| ACWI (iShares MSCI ACWI ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +22.7% | +43.4% |
| 5-year return | +69.0% | +145.2% |
| Volatility (ann.) | 13.8% | 24.0% |
| Beta vs S&P 500 | 0.92 | 1.50 |
| Max drawdown (3Y) | -16.5% | -25.7% |
| Dividend yield | 1.44% | 0.45% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $32.5B | $115.4B |
| Sector / category | ETF · Global | Sector ETF |
On the fund side, ACWI sits in the Global Large-Stock Blend category at iShares, with $32.5B under management, 1590 holdings, a 0.32% expense ratio, a 1.44% trailing dividend yield. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between ACWI and XLK
The two portfolios partially overlap. Weighing the shared positions, 22.8% of the two funds is identical, spread across 67 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in ACWI | Weight in XLK |
|---|---|---|
| NVDA | 4.64% | 13.91% |
| AAPL | 4.41% | 12.61% |
| MSFT | 3.35% | 10.10% |
| AVGO | 1.53% | 4.61% |
| MU | 1.01% | 3.99% |
| AMD | 0.75% | 4.09% |
| CSCO | 0.43% | 2.97% |
| LRCX | 0.37% | 2.62% |
| INTC | 0.37% | 2.92% |
| PLTR | 0.37% | 2.73% |
| AMAT | 0.36% | 2.55% |
| ROP | 0.34% | 0.28% |
| PANW | 0.26% | 1.84% |
| ORCL | 0.25% | 1.69% |
| TXN | 0.23% | 1.59% |
Largest positions held only by ACWI: AMZN (2.41%), GOOGL (1.91%), 2330 (1.79%), GOOG (1.50%), META (1.21%). Only by XLK: SNDK (1.49%), ZBRA (0.11%), AKAM (0.11%), IT (0.09%), GDDY (0.08%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | ACWI | XLK |
|---|---|---|
| 2022 | -18.4% | -27.7% |
| 2023 | +22.3% | +56.0% |
| 2024 | +17.4% | +21.6% |
| 2025 | +22.4% | +24.6% |
| 2026 | +14.9% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are ACWI and XLK good diversifiers for each other?
No. With a correlation of 0.86, ACWI and XLK move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between ACWI and XLK?
The ACWI/XLK correlation stands at 0.86 on a 3-year window (1 year: 0.82, 5 years: 0.87), computed from weekly returns as of 2026-08-27.
Is XLK a good diversifier for ACWI?
No. With a correlation of 0.86, ACWI and XLK move nearly in lockstep, so holding both adds very little diversification.
How much do ACWI and XLK overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 22.8% by weight over 67 common positions.
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Related comparisons
Hubs: ACWI correlations · XLK correlations
