EFA vs XLI: Correlation & Overlap
How closely do iShares MSCI EAFE ETF (EFA) and Industrial Select Sector SPDR Fund (XLI) trade together? Their weekly returns over three years give a correlation of 0.73, which is strong. By holdings, the two funds overlap 0.4% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and XLI?
Across a 3-year window, the weekly returns of EFA and XLI correlate at 0.73, strong. The relationship has been stable: the 1-year correlation (0.71) sits close to the 3-year figure. Stretching to 5 years gives 0.76, with an annualized covariance of 170.9 %².
Within EFA's tracked universe of 109 assets, XLI comes in at #34 by 3-year correlation. Neither side won the trailing year by much: +21.9% against +18.3%. The rolling one-year correlation moved between 0.57 and 0.85 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.
EFA vs XLI: side by side
| EFA (iShares MSCI EAFE ETF) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +18.3% |
| 5-year return | +56.7% | +84.0% |
| Volatility (ann.) | 14.9% | 15.7% |
| Beta vs S&P 500 | 0.77 | 0.89 |
| Max drawdown (3Y) | -14.1% | -18.5% |
| Dividend yield | 3.19% | 1.15% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $32.9B |
| Sector / category | ETF · International | Sector ETF |
EFA is a Foreign Large Blend fund from iShares: $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% 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 EFA and XLI
The two portfolios are largely distinct, with 2 holdings in common adding up to 0.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). 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 2026-08-26. Top 2 common positions shown.
Year-by-year returns
| Year | EFA | XLI |
|---|---|---|
| 2022 | -14.4% | -5.6% |
| 2023 | +18.4% | +18.1% |
| 2024 | +3.5% | +17.3% |
| 2025 | +31.5% | +19.3% |
| 2026 | +14.3% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLI good diversifiers for each other?
Only partially. A correlation of 0.73 means EFA 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 EFA and XLI?
Using weekly returns as of 2026-08-27: 0.73 over 3 years, with 0.71 over the last year and 0.76 over 5 years.
Is XLI a good diversifier for EFA?
Only partially. A correlation of 0.73 means EFA and XLI share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EFA and XLI overlap?
0.4% by weight, across 2 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/efa-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: EFA correlations · XLI correlations
