VWO vs XLI: Correlation & Overlap
How closely do Vanguard FTSE Emerging Markets ETF (VWO) and Industrial Select Sector SPDR Fund (XLI) trade together? Their weekly returns over three years give a correlation of 0.61, which is strong. By holdings, the two funds overlap 0.0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VWO and XLI?
On 3 years of weekly data the VWO/XLI correlation comes out at 0.61, strong. Recent behaviour matches the longer record: 0.62 over 1 year against 0.61 over 3. The 5-year figure is 0.58, and annualized covariance runs at 145.0 %².
By 3-year correlation, XLI places #40 of the 73 assets tracked against VWO. Twelve-month performance is nearly a tie, at +21.6% for VWO and +18.3% for XLI. Across three years, the rolling one-year figure varied moderately, from 0.38 to 0.78.
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 XLI: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +18.3% |
| 5-year return | +38.2% | +84.0% |
| Volatility (ann.) | 15.2% | 15.7% |
| Beta vs S&P 500 | 0.75 | 0.89 |
| Max drawdown (3Y) | -17.4% | -18.5% |
| Dividend yield | 2.36% | 1.15% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $32.9B |
| 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. 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 VWO and XLI
The two portfolios are largely distinct. Weighing the shared positions, 0.0% of the two funds is identical, spread across 1 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VWO | Weight in XLI |
|---|---|---|
| IEX | 0.01% | 0.31% |
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). Only by XLI: CAT (6.68%), GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%).
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 | XLI |
|---|---|---|
| 2022 | -18.0% | -5.6% |
| 2023 | +9.3% | +18.1% |
| 2024 | +10.6% | +17.3% |
| 2025 | +25.6% | +19.3% |
| 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 XLI good diversifiers for each other?
Only partially. A correlation of 0.61 means VWO and XLI 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 XLI?
The VWO/XLI correlation stands at 0.61 on a 3-year window (1 year: 0.62, 5 years: 0.58), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for VWO?
Only partially. A correlation of 0.61 means VWO and XLI share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VWO and XLI 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-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vwo-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: VWO correlations · XLI correlations
