VWO vs XLK: Correlation & Overlap
How closely do Vanguard FTSE Emerging Markets ETF (VWO) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.68, which is strong. 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 XLK?
On 3 years of weekly data the VWO/XLK correlation comes out at 0.68, strong. The relationship has been stable: the 1-year correlation (0.70) sits close to the 3-year figure. The 5-year figure is 0.61, and annualized covariance runs at 245.9 %².
Among the 73 assets we track against VWO, XLK ranks #27 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLK ahead by 21.8 points (+21.6% versus +43.4%). The rolling one-year correlation moved between 0.40 and 0.77 over the past three years, a moderate range. Risk is not evenly split, since XLK carries 1.6 times the volatility of the other side.
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 XLK: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +43.4% |
| 5-year return | +38.2% | +145.2% |
| Volatility (ann.) | 15.2% | 24.0% |
| Beta vs S&P 500 | 0.75 | 1.50 |
| Max drawdown (3Y) | -17.4% | -25.7% |
| Dividend yield | 2.36% | 0.45% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $115.4B |
| 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, 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 VWO and XLK
The two portfolios are largely distinct, with 2 holdings in common adding up to 0.0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). 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 2 common positions shown.
Year-by-year returns
| Year | VWO | XLK |
|---|---|---|
| 2022 | -18.0% | -27.7% |
| 2023 | +9.3% | +56.0% |
| 2024 | +10.6% | +21.6% |
| 2025 | +25.6% | +24.6% |
| 2026 | +13.6% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and XLK good diversifiers for each other?
Somewhat, no more. With 0.68 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VWO and XLK?
The VWO/XLK correlation stands at 0.68 on a 3-year window (1 year: 0.70, 5 years: 0.61), computed from weekly returns as of 2026-08-27.
Is XLK a good diversifier for VWO?
Somewhat, no more. With 0.68 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VWO and XLK overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.0% by weight over 2 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vwo-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/vwo-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VWO correlations · XLK correlations
