IEFA vs XLC: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and Communication Services Select Sector SPDR Fund (XLC) show a strong relationship: their 3-year correlation of weekly returns is 0.63. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and XLC?
Across a 3-year window, the weekly returns of IEFA and XLC correlate at 0.63, strong. The past 12 months show a weaker link (0.51) than the 3-year average (0.63). Stretching to 5 years gives 0.67, with an annualized covariance of 149.3 %².
Among the 111 assets we track against IEFA, XLC ranks #57 by 3-year correlation. Correlation aside, the last 12 months split them widely, with IEFA ahead by 20.3 points (+21.8% versus +1.5%). The rolling one-year correlation moved between 0.50 and 0.75 over the past three years, a moderate range.
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 XLC: side by side
| IEFA (iShares Core MSCI EAFE ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.8% | +1.5% |
| 5-year return | +54.5% | +37.5% |
| Volatility (ann.) | 15.0% | 16.0% |
| Beta vs S&P 500 | 0.77 | 0.90 |
| Max drawdown (3Y) | -13.8% | -18.0% |
| Dividend yield | 3.35% | 1.32% |
| Expense ratio | 0.07% | 0.08% |
| Assets under management | $190.1B | $21.7B |
| Sector / category | ETF · International | Sector ETF |
IEFA, iShares's Foreign Large Blend fund, carries $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between IEFA and XLC
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%). Only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), T (5.20%), VZ (4.99%).
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 | IEFA | XLC |
|---|---|---|
| 2022 | -15.2% | -37.6% |
| 2023 | +18.0% | +52.8% |
| 2024 | +3.3% | +34.7% |
| 2025 | +32.1% | +23.1% |
| 2026 | +14.5% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and XLC good diversifiers for each other?
To a limited degree. At 0.63 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between IEFA and XLC?
The IEFA/XLC correlation stands at 0.63 on a 3-year window (1 year: 0.51, 5 years: 0.67), computed from weekly returns as of 2026-08-27.
Is XLC a good diversifier for IEFA?
To a limited degree. At 0.63 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do IEFA and XLC overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-xlc.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iefa-vs-xlc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: IEFA correlations · XLC correlations
