EFA vs XLRE: Correlation & Overlap
How closely do iShares MSCI EAFE ETF (EFA) and Real Estate Select Sector SPDR Fund (XLRE) trade together? Their weekly returns over three years give a correlation of 0.54, which is moderate. Looking through to holdings, 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 EFA and XLRE?
Across a 3-year window, the weekly returns of EFA and XLRE correlate at 0.54, moderate. Recent behaviour matches the longer record: 0.47 over 1 year against 0.54 over 3. Stretching to 5 years gives 0.63, with an annualized covariance of 135.0 %².
Among the 109 assets we track against EFA, XLRE ranks #79 by 3-year correlation. Over the last 12 months EFA came out ahead by 12.4 percentage points (+21.9% against +9.5%). Across three years, the rolling one-year figure varied moderately, from 0.41 to 0.82.
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 XLRE: side by side
| EFA (iShares MSCI EAFE ETF) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +9.5% |
| 5-year return | +56.7% | +11.4% |
| Volatility (ann.) | 14.9% | 16.7% |
| Beta vs S&P 500 | 0.77 | 0.57 |
| Max drawdown (3Y) | -14.1% | -16.6% |
| Dividend yield | 3.19% | 3.12% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $8.6B |
| Sector / category | ETF · International | Sector ETF |
On the fund side, EFA sits in the Foreign Large Blend category at iShares, with $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% trailing dividend yield. On the fund side, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between EFA and XLRE
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 EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). Only by XLRE: WELL (11.43%), PLD (9.06%), EQIX (7.14%), AMT (5.49%), DLR (5.01%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | EFA | XLRE |
|---|---|---|
| 2022 | -14.4% | -26.2% |
| 2023 | +18.4% | +12.4% |
| 2024 | +3.5% | +5.1% |
| 2025 | +31.5% | +2.6% |
| 2026 | +14.3% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLRE good diversifiers for each other?
Somewhat, no more. With 0.54 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between EFA and XLRE?
Using weekly returns as of 2026-08-27: 0.54 over 3 years, with 0.47 over the last year and 0.63 over 5 years.
Is XLRE a good diversifier for EFA?
Somewhat, no more. With 0.54 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do EFA and XLRE overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
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Related comparisons
Hubs: EFA correlations · XLRE correlations
