VWO vs VYM: Correlation & Overlap
How closely do Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard High Dividend Yield ETF (VYM) trade together? Their weekly returns over three years give a correlation of 0.61, which is strong. Looking through to holdings, 0.2% 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 VWO and VYM?
Across a 3-year window, the weekly returns of VWO and VYM correlate at 0.61, strong. The relationship has been stable: the 1-year correlation (0.64) sits close to the 3-year figure. Stretching to 5 years gives 0.56, with an annualized covariance of 113.5 %².
By 3-year correlation, VYM places #38 of the 73 assets tracked against VWO. Their 12-month results are close: +21.6% for VWO against +21.1% for VYM. The rolling one-year correlation moved between 0.39 and 0.79 over the past three years, a moderate range.
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.
VWO vs VYM: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +21.6% | +21.1% |
| 5-year return | +38.2% | +76.6% |
| Volatility (ann.) | 15.2% | 12.3% |
| Beta vs S&P 500 | 0.75 | 0.69 |
| Max drawdown (3Y) | -17.4% | -14.5% |
| Dividend yield | 2.36% | 2.24% |
| Expense ratio | 0.06% | 0.04% |
| Assets under management | $162.0B | $99.2B |
| Sector / category | ETF · International | ETF · Dividend |
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. VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield.
Portfolio overlap between VWO and VYM
The two portfolios are largely distinct: 0.2% of the funds' weight sits in the same underlying holdings (14 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VWO | Weight in VYM |
|---|---|---|
| HAL | 0.10% | 0.11% |
| MTN | 0.22% | 0.02% |
| TEL | 0.02% | 0.24% |
| SLM | 0.09% | 0.02% |
| EL | 0.02% | 0.08% |
| MTH | 0.01% | 0.02% |
| HTO | 0.04% | 0.01% |
| CCL | 0.01% | 0.14% |
| M | 0.01% | 0.03% |
| IEX | 0.01% | 0.07% |
| SRE | 0.01% | 0.24% |
| SCI | 0.01% | 0.05% |
| DMC | 0.00% | 0.00% |
| ACI | 0.00% | 0.02% |
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). Only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 14 common positions shown.
Year-by-year returns
| Year | VWO | VYM |
|---|---|---|
| 2022 | -18.0% | -0.4% |
| 2023 | +9.3% | +6.6% |
| 2024 | +10.6% | +17.6% |
| 2025 | +25.6% | +15.4% |
| 2026 | +13.6% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and VYM good diversifiers for each other?
Only partially. A correlation of 0.61 means VWO and VYM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between VWO and VYM?
As of 2026-08-27, the correlation of weekly returns between VWO and VYM is 0.61 over 3 years, 0.64 over 1 year and 0.56 over 5 years.
Is VYM a good diversifier for VWO?
Only partially. A correlation of 0.61 means VWO and VYM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VWO and VYM overlap?
The two funds share 14 holdings amounting to 0.2% of weight, per issuer portfolio files dated 2026-07-31.
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