VWO vs XLV: Correlation & Overlap
How closely do Vanguard FTSE Emerging Markets ETF (VWO) and Health Care Select Sector SPDR Fund (XLV) trade together? Their weekly returns over three years give a correlation of 0.31, which is moderate. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VWO and XLV?
Across a 3-year window, the weekly returns of VWO and XLV correlate at 0.31, moderate. The link has loosened recently: the 1-year correlation (0.13) runs below the 3-year figure (0.31). Stretching to 5 years gives 0.33, with an annualized covariance of 69.1 %².
By 3-year correlation, XLV places #60 of the 73 assets tracked against VWO. On 12-month performance XLV holds a 5.9-point edge, +21.6% against +27.5%. The rolling one-year correlation moved between 0.16 and 0.57 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 XLV: side by side
| VWO (Vanguard FTSE Emerging Markets ETF) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.6% | +27.5% |
| 5-year return | +38.2% | +37.4% |
| Volatility (ann.) | 15.2% | 14.7% |
| Beta vs S&P 500 | 0.75 | 0.42 |
| Max drawdown (3Y) | -17.4% | -17.1% |
| Dividend yield | 2.36% | 1.56% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $162.0B | $41.7B |
| Sector / category | ETF · International | Sector ETF |
VWO, Vanguard's Diversified Emerging Mkts fund, carries $162.0B under management, 4113 holdings, a 0.06% expense ratio, a 2.36% trailing dividend yield. On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Portfolio overlap between VWO and XLV
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 XLV: LLY (15.03%), JNJ (10.38%), ABBV (7.42%), MRK (6.04%), UNH (5.82%).
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 | XLV |
|---|---|---|
| 2022 | -18.0% | -2.1% |
| 2023 | +9.3% | +2.1% |
| 2024 | +10.6% | +2.5% |
| 2025 | +25.6% | +14.5% |
| 2026 | +13.6% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VWO and XLV good diversifiers for each other?
A fair diversifier. At 0.31, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between VWO and XLV?
Using weekly returns as of 2026-08-27: 0.31 over 3 years, with 0.13 over the last year and 0.33 over 5 years.
Is XLV a good diversifier for VWO?
A fair diversifier. At 0.31, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do VWO and XLV overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vwo-vs-xlv.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vwo-vs-xlv/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: VWO correlations · XLV correlations
