VEA vs XLK: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard FTSE Developed Markets ETF (VEA) and Technology Select Sector SPDR Fund (XLK) carry a correlation of 0.64, a strong link. 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 XLK?
On 3 years of weekly data the VEA/XLK correlation comes out at 0.64, strong. Little has changed lately, as the 1-year reading of 0.62 lands near the 3-year figure. The 5-year figure is 0.68, and annualized covariance runs at 230.3 %².
Among the 107 assets we track against VEA, XLK ranks #52 by 3-year correlation. Over the last 12 months XLK came out ahead by 14.9 percentage points (+28.5% against +43.4%). The rolling one-year correlation moved between 0.47 and 0.76 over the past three years, a moderate range. One caveat on sizing: XLK is 1.6 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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 XLK: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.5% | +43.4% |
| 5-year return | +63.5% | +145.2% |
| Volatility (ann.) | 15.1% | 24.0% |
| Beta vs S&P 500 | 0.79 | 1.50 |
| Max drawdown (3Y) | -13.5% | -25.7% |
| Dividend yield | 2.56% | 0.45% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $314.9B | $115.4B |
| 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. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between VEA and XLK
The two portfolios are largely distinct. Weighing the shared positions, 0.3% of the two funds is identical, spread across 4 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), SAN (0.94%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 4 common positions shown.
Year-by-year returns
| Year | VEA | XLK |
|---|---|---|
| 2022 | -15.3% | -27.7% |
| 2023 | +17.9% | +56.0% |
| 2024 | +3.1% | +21.6% |
| 2025 | +35.2% | +24.6% |
| 2026 | +18.3% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and XLK good diversifiers for each other?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VEA and XLK?
Using weekly returns as of 2026-08-27: 0.64 over 3 years, with 0.62 over the last year and 0.68 over 5 years.
Is XLK a good diversifier for VEA?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VEA and XLK overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.3% by weight over 4 common positions.
Use this data
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Related comparisons
Hubs: VEA correlations · XLK correlations
