IEMG vs XLE: Correlation & Overlap
How closely do iShares Core MSCI Emerging Markets ETF (IEMG) and Energy Select Sector SPDR Fund (XLE) trade together? Their weekly returns over three years give a correlation of 0.02, which is near-zero. Looking through to holdings, 0.1% 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 IEMG and XLE?
Over the past 3 years, IEMG and XLE moved with a correlation of 0.02, which is near zero, meaning they move largely independently. The link has loosened recently: the 1-year correlation (-0.36) runs below the 3-year figure (0.02). Over 5 years the correlation is 0.13, and the annualized covariance of weekly returns is 8.7 %².
By 3-year correlation, XLE places #58 of the 68 assets tracked against IEMG. The trailing year gives XLE the advantage: +36.0% versus +44.0%, a 8.0-point spread. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from -0.39 to 0.42.
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 XLE: side by side
| IEMG (iShares Core MSCI Emerging Markets ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +36.0% | +44.0% |
| 5-year return | +50.7% | +206.7% |
| Volatility (ann.) | 17.4% | 23.1% |
| Beta vs S&P 500 | 0.84 | 0.27 |
| Max drawdown (3Y) | -17.2% | -20.1% |
| Dividend yield | 2.31% | 2.55% |
| Expense ratio | 0.09% | 0.08% |
| Assets under management | $152.2B | $39.2B |
| Sector / category | ETF · International | Sector ETF |
IEMG is a Diversified Emerging Mkts fund from iShares: $152.2B under management, 1824 holdings, a 0.09% expense ratio, a 2.31% trailing dividend yield. XLE is an Equity Energy fund from State Street Investment Management: $39.2B under management, 22 holdings, a 0.08% expense ratio, a 2.55% trailing dividend yield.
Portfolio overlap between IEMG and XLE
The two portfolios are largely distinct. Weighing the shared positions, 0.1% of the two funds is identical, spread across 1 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in IEMG | Weight in XLE |
|---|---|---|
| HAL | 0.06% | 1.71% |
Largest positions held only by IEMG: 2330 (13.28%), 005930 (6.27%), 000660 (4.78%), 700 (2.49%), 9988 (1.77%). Only by XLE: XOM (20.03%), CVX (14.84%), COP (6.30%), MPC (5.40%), PSX (5.37%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 1 common positions shown.
Year-by-year returns
| Year | IEMG | XLE |
|---|---|---|
| 2022 | -20.0% | +64.3% |
| 2023 | +11.5% | -0.6% |
| 2024 | +6.5% | +5.6% |
| 2025 | +32.6% | +7.9% |
| 2026 | +23.6% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEMG and XLE good diversifiers for each other?
Yes: at 0.02, the two have gone their own ways historically, which is what genuine diversification looks like.
FAQ
What is the correlation between IEMG and XLE?
As of 2026-08-27, the correlation of weekly returns between IEMG and XLE is 0.02 over 3 years, -0.36 over 1 year and 0.13 over 5 years.
Is XLE a good diversifier for IEMG?
Yes: at 0.02, the two have gone their own ways historically, which is what genuine diversification looks like.
How much do IEMG and XLE overlap?
The two funds share 1 holdings amounting to 0.1% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iemg-vs-xle.json
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Related comparisons
Hubs: IEMG correlations · XLE correlations
