IEFA vs XLI: Correlation & Overlap
How closely do iShares Core MSCI EAFE ETF (IEFA) and Industrial Select Sector SPDR Fund (XLI) trade together? Their weekly returns over three years give a correlation of 0.73, which is strong. Looking through to holdings, 0.3% 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 XLI?
Across a 3-year window, the weekly returns of IEFA and XLI correlate at 0.73, strong. The relationship has been stable: the 1-year correlation (0.70) sits close to the 3-year figure. Stretching to 5 years gives 0.76, with an annualized covariance of 171.4 %².
Among the 111 assets we track against IEFA, XLI ranks #36 by 3-year correlation. Their 12-month results are close: +21.8% for IEFA against +18.3% for XLI. On a rolling one-year basis the correlation drifted between 0.57 and 0.84, a moderate band.
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 XLI: side by side
| IEFA (iShares Core MSCI EAFE ETF) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.8% | +18.3% |
| 5-year return | +54.5% | +84.0% |
| Volatility (ann.) | 15.0% | 15.7% |
| Beta vs S&P 500 | 0.77 | 0.89 |
| Max drawdown (3Y) | -13.8% | -18.5% |
| Dividend yield | 3.35% | 1.15% |
| Expense ratio | 0.07% | 0.08% |
| Assets under management | $190.1B | $32.9B |
| 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. XLI is an Industrials fund from State Street Investment Management: $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Portfolio overlap between IEFA and XLI
The two portfolios are largely distinct: 0.3% 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 XLI: CAT (6.68%), GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%).
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 | XLI |
|---|---|---|
| 2022 | -15.2% | -5.6% |
| 2023 | +18.0% | +18.1% |
| 2024 | +3.3% | +17.3% |
| 2025 | +32.1% | +19.3% |
| 2026 | +14.5% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and XLI good diversifiers for each other?
To a limited degree. At 0.73 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 XLI?
The IEFA/XLI correlation stands at 0.73 on a 3-year window (1 year: 0.70, 5 years: 0.76), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for IEFA?
To a limited degree. At 0.73 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 XLI overlap?
The two funds share 4 holdings amounting to 0.3% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/iefa-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: IEFA correlations · XLI correlations
