EFA vs XLP: Correlation & Overlap
iShares MSCI EAFE ETF (EFA) and Consumer Staples Select Sector SPDR Fund (XLP) show a moderate relationship: their 3-year correlation of weekly returns is 0.48. By holdings, the two funds overlap 0.7% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and XLP?
Over the past 3 years, EFA and XLP moved with a correlation of 0.48, which is moderate. Recent behaviour matches the longer record: 0.39 over 1 year against 0.48 over 3. Over 5 years the correlation is 0.51, and the annualized covariance of weekly returns is 79.3 %².
Within EFA's tracked universe of 109 assets, XLP comes in at #92 by 3-year correlation. On 12-month performance EFA holds a 13.6-point edge, +21.9% against +8.3%. Across three years, the rolling one-year figure varied moderately, from 0.40 to 0.67.
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 XLP: side by side
| EFA (iShares MSCI EAFE ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +8.3% |
| 5-year return | +56.7% | +34.7% |
| Volatility (ann.) | 14.9% | 11.1% |
| Beta vs S&P 500 | 0.77 | 0.23 |
| Max drawdown (3Y) | -14.1% | -9.7% |
| Dividend yield | 3.19% | 2.58% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $14.6B |
| 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. 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 EFA and XLP
The two portfolios are largely distinct, with 4 holdings in common adding up to 0.7% 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 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 2026-08-26. Top 4 common positions shown.
Year-by-year returns
| Year | EFA | XLP |
|---|---|---|
| 2022 | -14.4% | -0.8% |
| 2023 | +18.4% | -0.8% |
| 2024 | +3.5% | +12.2% |
| 2025 | +31.5% | +1.5% |
| 2026 | +14.3% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLP good diversifiers for each other?
Reasonably. At 0.48, EFA and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between EFA and XLP?
As of 2026-08-27, the correlation of weekly returns between EFA and XLP is 0.48 over 3 years, 0.39 over 1 year and 0.51 over 5 years.
Is XLP a good diversifier for EFA?
Reasonably. At 0.48, EFA and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do EFA and XLP overlap?
The two funds share 4 holdings amounting to 0.7% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
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Related comparisons
Hubs: EFA correlations · XLP correlations
