VWO vs XLC: Correlation & Overlap
Vanguard FTSE Emerging Markets ETF (VWO) and Communication Services Select Sector SPDR Fund (XLC) show a moderate relationship: their 3-year correlation of weekly returns is 0.55. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VWO and XLC?
On 3 years of weekly data the VWO/XLC correlation comes out at 0.55, moderate. Little has changed lately, as the 1-year reading of 0.49 lands near the 3-year figure. The 5-year figure is 0.57, and annualized covariance runs at 133.0 %².
By 3-year correlation, XLC places #46 of the 73 assets tracked against VWO. Correlation aside, the last 12 months split them widely, with VWO ahead by 20.1 points (+21.6% versus +1.5%). The rolling one-year correlation moved between 0.33 and 0.73 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 XLC: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +1.5% |
| 5-year return | +38.2% | +37.5% |
| Volatility (ann.) | 15.2% | 16.0% |
| Beta vs S&P 500 | 0.75 | 0.90 |
| Max drawdown (3Y) | -17.4% | -18.0% |
| Dividend yield | 2.36% | 1.32% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $21.7B |
| Sector / category | ETF · International | Sector ETF |
VWO is a Diversified Emerging Mkts fund from Vanguard: $162.0B under management, 4113 holdings, a 0.06% expense ratio, a 2.36% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between VWO and XLC
The two portfolios are largely distinct. Weighing the shared positions, 0% of the two funds is identical, spread across 0 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). Only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), T (5.20%), VZ (4.99%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31.
Year-by-year returns
| Year | VWO | XLC |
|---|---|---|
| 2022 | -18.0% | -37.6% |
| 2023 | +9.3% | +52.8% |
| 2024 | +10.6% | +34.7% |
| 2025 | +25.6% | +23.1% |
| 2026 | +13.6% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and XLC good diversifiers for each other?
Somewhat, no more. With 0.55 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VWO and XLC?
Using weekly returns as of 2026-08-27: 0.55 over 3 years, with 0.49 over the last year and 0.57 over 5 years.
Is XLC a good diversifier for VWO?
Somewhat, no more. With 0.55 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VWO and XLC overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vwo-vs-xlc.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/vwo-vs-xlc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VWO correlations · XLC correlations
