IEFA vs XLK: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and Technology Select Sector SPDR Fund (XLK) show a strong relationship: their 3-year correlation of weekly returns is 0.60. 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 XLK?
Over the past 3 years, IEFA and XLK moved with a correlation of 0.60, which is strong. Recent behaviour matches the longer record: 0.53 over 1 year against 0.60 over 3. Over 5 years the correlation is 0.66, and the annualized covariance of weekly returns is 215.6 %².
By 3-year correlation, XLK places #68 of the 111 assets tracked against IEFA. Their recent paths diverged sharply: over the last 12 months XLK outperformed by 21.6 percentage points (+21.8% for IEFA against +43.4% for XLK). The rolling one-year correlation moved between 0.48 and 0.74 over the past three years, a moderate range. One caveat on sizing: XLK is 1.6 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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 XLK: side by side
| IEFA (iShares Core MSCI EAFE ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.8% | +43.4% |
| 5-year return | +54.5% | +145.2% |
| Volatility (ann.) | 15.0% | 24.0% |
| Beta vs S&P 500 | 0.77 | 1.50 |
| Max drawdown (3Y) | -13.8% | -25.7% |
| Dividend yield | 3.35% | 0.45% |
| Expense ratio | 0.07% | 0.08% |
| Assets under management | $190.1B | $115.4B |
| 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. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between IEFA and XLK
The two portfolios are largely distinct, with 2 holdings in common adding up to 0.3% 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%), SAN (1.17%), NOVN (1.10%), NESN (0.97%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 2 common positions shown.
Year-by-year returns
| Year | IEFA | XLK |
|---|---|---|
| 2022 | -15.2% | -27.7% |
| 2023 | +18.0% | +56.0% |
| 2024 | +3.3% | +21.6% |
| 2025 | +32.1% | +24.6% |
| 2026 | +14.5% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and XLK good diversifiers for each other?
To a limited degree. At 0.60 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 XLK?
As of 2026-08-27, the correlation of weekly returns between IEFA and XLK is 0.60 over 3 years, 0.53 over 1 year and 0.66 over 5 years.
Is XLK a good diversifier for IEFA?
To a limited degree. At 0.60 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 XLK overlap?
The two funds share 2 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-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iefa-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: IEFA correlations · XLK correlations
