VEA vs XLI: Correlation & Overlap
Vanguard FTSE Developed Markets ETF (VEA) and Industrial Select Sector SPDR Fund (XLI) show a strong relationship: their 3-year correlation of weekly returns is 0.73. The two funds also share 0.3% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and XLI?
Over the past 3 years, VEA and XLI moved with a correlation of 0.73, which is strong. Little has changed lately, as the 1-year reading of 0.69 lands near the 3-year figure. Over 5 years the correlation is 0.77, and the annualized covariance of weekly returns is 174.6 %².
Among the 107 assets we track against VEA, XLI ranks #34 by 3-year correlation. Over the last 12 months VEA came out ahead by 10.2 percentage points (+28.5% against +18.3%). Stability stands out here, with the rolling one-year correlation confined to 0.62 through 0.86.
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 XLI: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.5% | +18.3% |
| 5-year return | +63.5% | +84.0% |
| Volatility (ann.) | 15.1% | 15.7% |
| Beta vs S&P 500 | 0.79 | 0.89 |
| Max drawdown (3Y) | -13.5% | -18.5% |
| Dividend yield | 2.56% | 1.15% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $314.9B | $32.9B |
| Sector / category | ETF · International | Sector ETF |
VEA, Vanguard's Foreign Large Blend fund, carries $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield. XLI is an Industrials fund from State Street Investment Management: $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Portfolio overlap between VEA and XLI
The two portfolios are largely distinct. Weighing the shared positions, 0.3% of the two funds is identical, spread across 7 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VEA | Weight in XLI |
|---|---|---|
| BA | 0.26% | 2.95% |
| ADP | 0.02% | 1.98% |
| EFX | 0.01% | 0.40% |
| EMR | 0.01% | 1.56% |
| RSG | 0.00% | 0.78% |
| CAT | 0.00% | 6.68% |
| PNR | 0.00% | 0.18% |
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%). Only by XLI: GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%), ETN (2.87%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 7 common positions shown.
Year-by-year returns
| Year | VEA | XLI |
|---|---|---|
| 2022 | -15.3% | -5.6% |
| 2023 | +17.9% | +18.1% |
| 2024 | +3.1% | +17.3% |
| 2025 | +35.2% | +19.3% |
| 2026 | +18.3% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and XLI good diversifiers for each other?
To a limited degree. At 0.73 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 VEA and XLI?
The VEA/XLI correlation stands at 0.73 on a 3-year window (1 year: 0.69, 5 years: 0.77), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for VEA?
To a limited degree. At 0.73 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 VEA and XLI overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.3% by weight over 7 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vea-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vea-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
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Hubs: VEA correlations · XLI correlations
