EEM vs IWM: Correlation & Overlap
iShares MSCI Emerging Markets ETF (EEM) and iShares Russell 2000 ETF (IWM) show a strong relationship: their 3-year correlation of weekly returns is 0.60. The two funds also share 0.3% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and IWM?
Across a 3-year window, the weekly returns of EEM and IWM correlate at 0.60, strong. Little has changed lately, as the 1-year reading of 0.67 lands near the 3-year figure. Stretching to 5 years gives 0.60, with an annualized covariance of 213.7 %².
Among the 67 assets we track against EEM, IWM ranks #32 by 3-year correlation. The trailing year gives EEM the advantage: +38.1% versus +28.4%, a 9.7-point spread. Across three years, the rolling one-year figure varied moderately, from 0.40 to 0.75.
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.
EEM vs IWM: side by side
| EEM (iShares MSCI Emerging Markets ETF) | IWM (iShares Russell 2000 ETF) | |
|---|---|---|
| 1-year return | +38.1% | +28.4% |
| 5-year return | +47.1% | +41.5% |
| Volatility (ann.) | 18.0% | 19.8% |
| Beta vs S&P 500 | 0.85 | 1.06 |
| Max drawdown (3Y) | -17.3% | -27.5% |
| Dividend yield | 1.73% | 0.91% |
| Expense ratio | 0.72% | 0.19% |
| Assets under management | $29.2B | $80.1B |
| Sector / category | ETF · International | ETF · US Small & Mid Cap |
EEM is a Diversified Emerging Mkts fund from iShares: $29.2B under management, 968 holdings, a 0.72% expense ratio, a 1.73% trailing dividend yield. IWM, iShares's Small Blend fund, carries $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield.
Portfolio overlap between EEM and IWM
The two portfolios are largely distinct. Weighing the shared positions, 0.3% of the two funds is identical, spread across 6 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in EEM | Weight in IWM |
|---|---|---|
| VAL | 0.19% | 0.15% |
| ABG | 0.10% | 0.13% |
| OUT | 0.03% | 0.16% |
| HTO | 0.03% | 0.07% |
| SM | 0.02% | 0.27% |
| STNE | 0.02% | 0.07% |
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). Only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 6 common positions shown.
Year-by-year returns
| Year | EEM | IWM |
|---|---|---|
| 2022 | -20.6% | -20.5% |
| 2023 | +8.9% | +16.8% |
| 2024 | +6.5% | +11.4% |
| 2025 | +34.0% | +12.7% |
| 2026 | +24.2% | +22.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and IWM good diversifiers for each other?
Only partially. A correlation of 0.60 means EEM and IWM 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 EEM and IWM?
As of 2026-08-27, the correlation of weekly returns between EEM and IWM is 0.60 over 3 years, 0.67 over 1 year and 0.60 over 5 years.
Is IWM a good diversifier for EEM?
Only partially. A correlation of 0.60 means EEM and IWM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EEM and IWM overlap?
0.3% by weight, across 6 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/eem-vs-iwm.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/eem-vs-iwm/)
No key needed, free to use. Full endpoint list in the API documentation.
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Hubs: EEM correlations · IWM correlations
