EEM vs XLU: Correlation & Overlap
How closely do iShares MSCI Emerging Markets ETF (EEM) and Utilities Select Sector SPDR Fund (XLU) trade together? Their weekly returns over three years give a correlation of 0.25, which is weak. Looking through to holdings, 0% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and XLU?
Across a 3-year window, the weekly returns of EEM and XLU correlate at 0.25, weak. Lately the two have drifted apart, with the 1-year correlation at 0.05 versus 0.25 over 3 years. Stretching to 5 years gives 0.25, with an annualized covariance of 70.3 %².
Within EEM's tracked universe of 67 assets, XLU comes in at #55 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months EEM outperformed by 34.0 percentage points (+38.1% for EEM against +4.1% for XLU). On a rolling one-year basis the correlation drifted between 0.06 and 0.47, a moderate band.
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 XLU: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +4.1% |
| 5-year return | +47.1% | +46.3% |
| Volatility (ann.) | 18.0% | 15.8% |
| Beta vs S&P 500 | 0.85 | 0.26 |
| Max drawdown (3Y) | -17.3% | -13.1% |
| Dividend yield | 1.73% | 2.70% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $23.1B |
| Sector / category | ETF · International | Sector ETF |
On the fund side, EEM sits in the Diversified Emerging Mkts category at iShares, with $29.2B under management, 968 holdings, a 0.72% expense ratio, a 1.73% 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 EEM and XLU
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). 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 | EEM | XLU |
|---|---|---|
| 2022 | -20.6% | +1.4% |
| 2023 | +8.9% | -7.2% |
| 2024 | +6.5% | +23.3% |
| 2025 | +34.0% | +16.0% |
| 2026 | +24.2% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLU good diversifiers for each other?
A fair diversifier. At 0.25, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between EEM and XLU?
The EEM/XLU correlation stands at 0.25 on a 3-year window (1 year: 0.05, 5 years: 0.25), computed from weekly returns as of 2026-08-27.
Is XLU a good diversifier for EEM?
A fair diversifier. At 0.25, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do EEM and XLU overlap?
0% by weight, across 0 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-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/eem-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EEM correlations · XLU correlations
