VWO vs XLB: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard FTSE Emerging Markets ETF (VWO) and Materials Select Sector SPDR Fund (XLB) carry a correlation of 0.61, a strong link. The two funds also share 0.0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VWO and XLB?
Across a 3-year window, the weekly returns of VWO and XLB correlate at 0.61, strong. The relationship has been stable: the 1-year correlation (0.58) sits close to the 3-year figure. Stretching to 5 years gives 0.64, with an annualized covariance of 155.8 %².
Among the 73 assets we track against VWO, XLB ranks #39 by 3-year correlation. Neither side won the trailing year by much: +21.6% against +17.6%. The rolling one-year correlation moved between 0.44 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 XLB: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +17.6% |
| 5-year return | +38.2% | +36.9% |
| Volatility (ann.) | 15.2% | 16.7% |
| Beta vs S&P 500 | 0.75 | 0.72 |
| Max drawdown (3Y) | -17.4% | -23.2% |
| Dividend yield | 2.36% | 1.68% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $8.3B |
| Sector / category | ETF · International | Sector ETF |
VWO, Vanguard's Diversified Emerging Mkts fund, carries $162.0B under management, 4113 holdings, a 0.06% expense ratio, a 2.36% trailing dividend yield. XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Portfolio overlap between VWO and XLB
The two portfolios are largely distinct: 0.0% of the funds' weight sits in the same underlying holdings (1 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VWO | Weight in XLB |
|---|---|---|
| ECL | 0.01% | 4.80% |
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). Only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), CTVA (4.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 1 common positions shown.
Year-by-year returns
| Year | VWO | XLB |
|---|---|---|
| 2022 | -18.0% | -12.3% |
| 2023 | +9.3% | +12.5% |
| 2024 | +10.6% | +0.1% |
| 2025 | +25.6% | +9.9% |
| 2026 | +13.6% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and XLB good diversifiers for each other?
Somewhat, no more. With 0.61 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VWO and XLB?
Using weekly returns as of 2026-08-27: 0.61 over 3 years, with 0.58 over the last year and 0.64 over 5 years.
Is XLB a good diversifier for VWO?
Somewhat, no more. With 0.61 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VWO and XLB overlap?
The two funds share 1 holdings amounting to 0.0% of weight, per issuer portfolio files dated 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vwo-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/vwo-vs-xlb/)
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Related comparisons
Hubs: VWO correlations · XLB correlations
