FXI vs XLF: Correlation & Overlap
How closely do iShares China Large-Cap ETF (FXI) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.28, which is weak. 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 FXI and XLF?
Over the past 3 years, FXI and XLF moved with a correlation of 0.28, which is weak. Recent behaviour matches the longer record: 0.35 over 1 year against 0.28 over 3. Over 5 years the correlation is 0.28, and the annualized covariance of weekly returns is 116.1 %².
By 3-year correlation, XLF places #55 of the 74 assets tracked against FXI. Their recent paths diverged sharply: over the last 12 months XLF outperformed by 15.4 percentage points (-6.1% for FXI against +9.3% for XLF). The rolling one-year correlation moved between 0.09 and 0.58 over the past three years, a moderate range. Note the risk asymmetry: FXI runs 1.6 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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.
FXI vs XLF: side by side
| FXI (iShares China Large-Cap ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | -6.1% | +9.3% |
| 5-year return | -1.4% | +64.2% |
| Volatility (ann.) | 25.3% | 16.2% |
| Beta vs S&P 500 | 0.68 | 0.84 |
| Max drawdown (3Y) | -23.2% | -15.5% |
| Dividend yield | 1.87% | 1.42% |
| Expense ratio | 0.73% | 0.08% |
| Assets under management | $4.3B | $57.9B |
| Sector / category | ETF · International | Sector ETF |
FXI is a Greater China Region fund from iShares: $4.3B under management, 50 holdings, a 0.73% expense ratio, a 1.87% trailing dividend yield. XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Portfolio overlap between FXI and XLF
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by FXI: 9988 (9.72%), 939 (9.09%), 700 (8.51%), 1398 (6.35%), 1810 (5.16%). Only by XLF: JPM (11.61%), BRK.B (11.25%), V (7.74%), MA (5.87%), BAC (4.94%).
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 | FXI | XLF |
|---|---|---|
| 2022 | -20.7% | -10.6% |
| 2023 | -12.4% | +12.0% |
| 2024 | +29.0% | +30.6% |
| 2025 | +28.9% | +14.9% |
| 2026 | -7.3% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are FXI and XLF good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.28 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between FXI and XLF?
The FXI/XLF correlation stands at 0.28 on a 3-year window (1 year: 0.35, 5 years: 0.28), computed from weekly returns as of 2026-08-27.
Is XLF a good diversifier for FXI?
Yes, to a useful degree: a correlation of 0.28 leaves real independence between the two, which historically damped combined volatility.
How much do FXI and XLF overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
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