IEMG vs XLP: Correlation & Overlap
iShares Core MSCI Emerging Markets ETF (IEMG) and Consumer Staples Select Sector SPDR Fund (XLP) show a weak relationship: their 3-year correlation of weekly returns is 0.25. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEMG and XLP?
Across a 3-year window, the weekly returns of IEMG and XLP correlate at 0.25, weak. The past 12 months show a weaker link (0.12) than the 3-year average (0.25). Stretching to 5 years gives 0.28, with an annualized covariance of 48.0 %².
Within IEMG's tracked universe of 68 assets, XLP comes in at #56 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months IEMG outperformed by 27.7 percentage points (+36.0% for IEMG against +8.3% for XLP). The rolling one-year correlation moved between 0.13 and 0.47 over the past three years, a moderate range. Note the risk asymmetry: IEMG runs 1.6 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.
IEMG vs XLP: side by side
| IEMG (iShares Core MSCI Emerging Markets ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +36.0% | +8.3% |
| 5-year return | +50.7% | +34.7% |
| Volatility (ann.) | 17.4% | 11.1% |
| Beta vs S&P 500 | 0.84 | 0.23 |
| Max drawdown (3Y) | -17.2% | -9.7% |
| Dividend yield | 2.31% | 2.58% |
| Expense ratio | 0.09% | 0.08% |
| Assets under management | $152.2B | $14.6B |
| 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. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between IEMG and XLP
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by IEMG: 2330 (13.28%), 005930 (6.27%), 000660 (4.78%), 700 (2.49%), 9988 (1.77%). Only by XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%).
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 | IEMG | XLP |
|---|---|---|
| 2022 | -20.0% | -0.8% |
| 2023 | +11.5% | -0.8% |
| 2024 | +6.5% | +12.2% |
| 2025 | +32.6% | +1.5% |
| 2026 | +23.6% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEMG and XLP good diversifiers for each other?
Reasonably. At 0.25, IEMG and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between IEMG and XLP?
Using weekly returns as of 2026-08-27: 0.25 over 3 years, with 0.12 over the last year and 0.28 over 5 years.
Is XLP a good diversifier for IEMG?
Reasonably. At 0.25, IEMG and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do IEMG and XLP overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
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Related comparisons
Hubs: IEMG correlations · XLP correlations
