IEMG vs SPY: Correlation & Overlap
How closely do iShares Core MSCI Emerging Markets ETF (IEMG) and SPDR S&P 500 ETF Trust (SPY) trade together? Their weekly returns over three years give a correlation of 0.70, which is strong. By holdings, the two funds overlap 0.1% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEMG and SPY?
Across a 3-year window, the weekly returns of IEMG and SPY correlate at 0.70, strong. Recent behaviour matches the longer record: 0.73 over 1 year against 0.70 over 3. Stretching to 5 years gives 0.66, with an annualized covariance of 175.2 %².
By 3-year correlation, SPY places #19 of the 68 assets tracked against IEMG. The last year tells two different stories: IEMG led by 15.4 percentage points, +36.0% for IEMG against +20.6% for SPY. The rolling one-year correlation stayed in a tight band between 0.57 and 0.78 over the past three years, which points to a structural rather than episodic relationship.
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.
IEMG vs SPY: side by side
| IEMG (iShares Core MSCI Emerging Markets ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +36.0% | +20.6% |
| 5-year return | +50.7% | +82.4% |
| Volatility (ann.) | 17.4% | 14.5% |
| Beta vs S&P 500 | 0.84 | 1.00 |
| Max drawdown (3Y) | -17.2% | -18.8% |
| Dividend yield | 2.31% | 1.01% |
| Expense ratio | 0.09% | 0.09% |
| Assets under management | $152.2B | $795.3B |
| Sector / category | ETF · International | ETF · US Large Cap |
IEMG, iShares's Diversified Emerging Mkts fund, carries $152.2B under management, 1824 holdings, a 0.09% expense ratio, a 2.31% trailing dividend yield. SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield.
Portfolio overlap between IEMG and SPY
The two portfolios are largely distinct, with 7 holdings in common adding up to 0.1% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in IEMG | Weight in SPY |
|---|---|---|
| HAL | 0.06% | 0.04% |
| BDX | 0.02% | 0.08% |
| TEL | 0.01% | 0.09% |
| ECL | 0.01% | 0.11% |
| LULU | 0.01% | 0.02% |
| SRE | 0.01% | 0.08% |
| CCL | 0.01% | 0.05% |
Largest positions held only by IEMG: 2330 (13.28%), 005930 (6.27%), 000660 (4.78%), 700 (2.49%), 9988 (1.77%). Only by SPY: NVDA (7.68%), AAPL (6.96%), MSFT (5.58%), AMZN (3.85%), GOOGL (3.03%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 7 common positions shown.
Year-by-year returns
| Year | IEMG | SPY |
|---|---|---|
| 2022 | -20.0% | -18.2% |
| 2023 | +11.5% | +26.2% |
| 2024 | +6.5% | +24.9% |
| 2025 | +32.6% | +17.7% |
| 2026 | +23.6% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEMG and SPY good diversifiers for each other?
To a limited degree. At 0.70 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between IEMG and SPY?
Using weekly returns as of 2026-08-27: 0.70 over 3 years, with 0.73 over the last year and 0.66 over 5 years.
Is SPY a good diversifier for IEMG?
To a limited degree. At 0.70 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do IEMG and SPY overlap?
The two funds share 7 holdings amounting to 0.1% of weight, per issuer portfolio files dated 2026-08-26.
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Hubs: IEMG correlations · SPY correlations
