IEFA vs XLB: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and Materials Select Sector SPDR Fund (XLB) show a strong relationship: their 3-year correlation of weekly returns is 0.75. Looking through to holdings, 0.1% 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 IEFA and XLB?
Over the past 3 years, IEFA and XLB moved with a correlation of 0.75, which is strong. Recent behaviour matches the longer record: 0.70 over 1 year against 0.75 over 3. Over 5 years the correlation is 0.80, and the annualized covariance of weekly returns is 188.1 %².
Within IEFA's tracked universe of 111 assets, XLB comes in at #30 by 3-year correlation. Twelve-month performance is nearly a tie, at +21.8% for IEFA and +17.6% for XLB. Stability stands out here, with the rolling one-year correlation confined to 0.66 through 0.90.
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.
IEFA vs XLB: side by side
| IEFA (iShares Core MSCI EAFE ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.8% | +17.6% |
| 5-year return | +54.5% | +36.9% |
| Volatility (ann.) | 15.0% | 16.7% |
| Beta vs S&P 500 | 0.77 | 0.72 |
| Max drawdown (3Y) | -13.8% | -23.2% |
| Dividend yield | 3.35% | 1.68% |
| Expense ratio | 0.07% | 0.08% |
| Assets under management | $190.1B | $8.3B |
| Sector / category | ETF · International | Sector ETF |
IEFA is a Foreign Large Blend fund from iShares: $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield. XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Portfolio overlap between IEFA and XLB
The two portfolios are largely distinct: 0.1% of the funds' weight sits in the same underlying holdings (4 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%). Only by XLB: LIN (12.94%), FCX (6.48%), SHW (4.87%), ECL (4.80%), CTVA (4.72%).
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 | IEFA | XLB |
|---|---|---|
| 2022 | -15.2% | -12.3% |
| 2023 | +18.0% | +12.5% |
| 2024 | +3.3% | +0.1% |
| 2025 | +32.1% | +9.9% |
| 2026 | +14.5% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and XLB good diversifiers for each other?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between IEFA and XLB?
The IEFA/XLB correlation stands at 0.75 on a 3-year window (1 year: 0.70, 5 years: 0.80), computed from weekly returns as of 2026-08-27.
Is XLB a good diversifier for IEFA?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do IEFA and XLB overlap?
The two funds share 4 holdings amounting to 0.1% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/iefa-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: IEFA correlations · XLB correlations
