VWO vs XLP: Correlation & Overlap
How closely do Vanguard FTSE Emerging Markets ETF (VWO) and Consumer Staples Select Sector SPDR Fund (XLP) trade together? Their weekly returns over three years give a correlation of 0.26, which is weak. Looking through to holdings, 0.0% 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 XLP?
On 3 years of weekly data the VWO/XLP correlation comes out at 0.26, weak. Little has changed lately, as the 1-year reading of 0.18 lands near the 3-year figure. The 5-year figure is 0.28, and annualized covariance runs at 44.2 %².
Within VWO's tracked universe of 73 assets, XLP comes in at #62 by 3-year correlation. The trailing year gives VWO the advantage: +21.6% versus +8.3%, a 13.3-point spread. Across three years, the rolling one-year figure varied moderately, from 0.13 to 0.47.
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 XLP: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +8.3% |
| 5-year return | +38.2% | +34.7% |
| Volatility (ann.) | 15.2% | 11.1% |
| Beta vs S&P 500 | 0.75 | 0.23 |
| Max drawdown (3Y) | -17.4% | -9.7% |
| Dividend yield | 2.36% | 2.58% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $14.6B |
| Sector / category | ETF · International | Sector ETF |
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. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between VWO and XLP
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 XLP |
|---|---|---|
| EL | 0.02% | 1.63% |
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). Only by XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%).
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 | XLP |
|---|---|---|
| 2022 | -18.0% | -0.8% |
| 2023 | +9.3% | -0.8% |
| 2024 | +10.6% | +12.2% |
| 2025 | +25.6% | +1.5% |
| 2026 | +13.6% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and XLP good diversifiers for each other?
Reasonably. At 0.26, VWO and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between VWO and XLP?
As of 2026-08-27, the correlation of weekly returns between VWO and XLP is 0.26 over 3 years, 0.18 over 1 year and 0.28 over 5 years.
Is XLP a good diversifier for VWO?
Reasonably. At 0.26, VWO and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do VWO and XLP overlap?
0.0% by weight, across 1 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-xlp.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/vwo-vs-xlp/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VWO correlations · XLP correlations
