VWO vs XLU: Correlation & Overlap
Vanguard FTSE Emerging Markets ETF (VWO) and Utilities Select Sector SPDR Fund (XLU) show a weak relationship: their 3-year correlation of weekly returns is 0.28. 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 XLU?
Across a 3-year window, the weekly returns of VWO and XLU correlate at 0.28, weak. Lately the two have drifted apart, with the 1-year correlation at 0.07 versus 0.28 over 3 years. Stretching to 5 years gives 0.27, with an annualized covariance of 67.0 %².
Within VWO's tracked universe of 73 assets, XLU comes in at #61 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months VWO outperformed by 17.5 percentage points (+21.6% for VWO against +4.1% for XLU). On a rolling one-year basis the correlation drifted between 0.09 and 0.46, a moderate band.
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 XLU: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +4.1% |
| 5-year return | +38.2% | +46.3% |
| Volatility (ann.) | 15.2% | 15.8% |
| Beta vs S&P 500 | 0.75 | 0.26 |
| Max drawdown (3Y) | -17.4% | -13.1% |
| Dividend yield | 2.36% | 2.70% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $23.1B |
| 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. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between VWO and XLU
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 XLU |
|---|---|---|
| SRE | 0.01% | 4.11% |
Largest positions held only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%). Only by XLU: NEE (12.94%), SO (7.45%), DUK (7.00%), CEG (6.58%), AEP (4.94%).
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 | XLU |
|---|---|---|
| 2022 | -18.0% | +1.4% |
| 2023 | +9.3% | -7.2% |
| 2024 | +10.6% | +23.3% |
| 2025 | +25.6% | +16.0% |
| 2026 | +13.6% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and XLU good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.28 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between VWO and XLU?
Using weekly returns as of 2026-08-27: 0.28 over 3 years, with 0.07 over the last year and 0.27 over 5 years.
Is XLU a good diversifier for VWO?
Yes, to a useful degree: a correlation of 0.28 leaves real independence between the two, which historically damped combined volatility.
How much do VWO and XLU 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-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vwo-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VWO correlations · XLU correlations
