VEA vs VWO: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard FTSE Developed Markets ETF (VEA) and Vanguard FTSE Emerging Markets ETF (VWO) carry a correlation of 0.83, a very strong link. By holdings, the two funds overlap 0.9% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and VWO?
Over the past 3 years, VEA and VWO moved with a correlation of 0.83, which is very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.91 lands near the 3-year figure. Over 5 years the correlation is 0.81, and the annualized covariance of weekly returns is 190.5 %².
Within VEA's tracked universe of 107 assets, VWO comes in at #12 by 3-year correlation. Over the last 12 months VEA came out ahead by 6.9 percentage points (+28.5% against +21.6%). On a rolling one-year basis the correlation drifted between 0.67 and 0.92, 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.
VEA vs VWO: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | VWO (Vanguard FTSE Emerging Markets ETF) | |
|---|---|---|
| 1-year return | +28.5% | +21.6% |
| 5-year return | +63.5% | +38.2% |
| Volatility (ann.) | 15.1% | 15.2% |
| Beta vs S&P 500 | 0.79 | 0.75 |
| Max drawdown (3Y) | -13.5% | -17.4% |
| Dividend yield | 2.56% | 2.36% |
| Expense ratio | 0.03% | 0.06% |
| Assets under management | $314.9B | $162.0B |
| Sector / category | ETF · International | ETF · International |
VEA is a Foreign Large Blend fund from Vanguard: $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield. On the fund side, VWO sits in the Diversified Emerging Mkts category at Vanguard, with $162.0B under management, 4113 holdings, a 0.06% expense ratio, a 2.36% trailing dividend yield.
Portfolio overlap between VEA and VWO
The two portfolios are largely distinct, with 158 holdings in common adding up to 0.9% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VEA | Weight in VWO |
|---|---|---|
| DSY | 0.05% | 0.09% |
| 7203 | 0.64% | 0.05% |
| VOD | 0.09% | 0.04% |
| SOL | 0.04% | 0.08% |
| 1801 | 0.04% | 0.19% |
| CLS | 0.12% | 0.03% |
| 1605 | 0.06% | 0.03% |
| AC | 0.04% | 0.03% |
| 2801 | 0.02% | 0.06% |
| TEL | 0.03% | 0.02% |
| 2269 | 0.02% | 0.19% |
| EL | 0.17% | 0.02% |
| 6098 | 0.34% | 0.02% |
| 6869 | 0.01% | 0.05% |
| 7202 | 0.02% | 0.01% |
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%). Only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 15 common positions shown.
Year-by-year returns
| Year | VEA | VWO |
|---|---|---|
| 2022 | -15.3% | -18.0% |
| 2023 | +17.9% | +9.3% |
| 2024 | +3.1% | +10.6% |
| 2025 | +35.2% | +25.6% |
| 2026 | +18.3% | +13.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and VWO good diversifiers for each other?
Not really. At 0.83, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between VEA and VWO?
Using weekly returns as of 2026-08-27: 0.83 over 3 years, with 0.91 over the last year and 0.81 over 5 years.
Is VWO a good diversifier for VEA?
Not really. At 0.83, the two trade almost as one position, and owning both buys little extra protection.
How much do VEA and VWO overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.9% by weight over 158 common positions.
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Related comparisons
Hubs: VEA correlations · VWO correlations
