EFA vs XLU: Correlation & Overlap
How closely do iShares MSCI EAFE ETF (EFA) and Utilities Select Sector SPDR Fund (XLU) trade together? Their weekly returns over three years give a correlation of 0.35, which is moderate. Looking through to holdings, 0.5% 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 XLU?
Across a 3-year window, the weekly returns of EFA and XLU correlate at 0.35, moderate. The link has loosened recently: the 1-year correlation (0.20) runs below the 3-year figure (0.35). Stretching to 5 years gives 0.40, with an annualized covariance of 82.3 %².
By 3-year correlation, XLU places #98 of the 109 assets tracked against EFA. The last year tells two different stories: EFA led by 17.8 percentage points, +21.9% for EFA against +4.1% for XLU. Across three years, the rolling one-year figure varied moderately, from 0.21 to 0.61.
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 XLU: side by side
| EFA (iShares MSCI EAFE ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +4.1% |
| 5-year return | +56.7% | +46.3% |
| Volatility (ann.) | 14.9% | 15.8% |
| Beta vs S&P 500 | 0.77 | 0.26 |
| Max drawdown (3Y) | -14.1% | -13.1% |
| Dividend yield | 3.19% | 2.70% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $23.1B |
| 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. 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 EFA and XLU
The two portfolios are largely distinct. Weighing the shared positions, 0.5% of the two funds is identical, spread across 1 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in EFA | Weight in XLU |
|---|---|---|
| DTE | 0.51% | 2.11% |
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). 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 2026-08-26. Top 1 common positions shown.
Year-by-year returns
| Year | EFA | XLU |
|---|---|---|
| 2022 | -14.4% | +1.4% |
| 2023 | +18.4% | -7.2% |
| 2024 | +3.5% | +23.3% |
| 2025 | +31.5% | +16.0% |
| 2026 | +14.3% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLU good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.35 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between EFA and XLU?
The EFA/XLU correlation stands at 0.35 on a 3-year window (1 year: 0.20, 5 years: 0.40), computed from weekly returns as of 2026-08-27.
Is XLU a good diversifier for EFA?
Yes, to a useful degree: a correlation of 0.35 leaves real independence between the two, which historically damped combined volatility.
How much do EFA and XLU overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0.5% by weight over 1 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/efa-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EFA correlations · XLU correlations
