IEFA vs XLP: Correlation & Overlap
How closely do iShares Core MSCI EAFE ETF (IEFA) and Consumer Staples Select Sector SPDR Fund (XLP) trade together? Their weekly returns over three years give a correlation of 0.47, which is moderate. By holdings, the two funds overlap 0.6% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and XLP?
Across a 3-year window, the weekly returns of IEFA and XLP correlate at 0.47, moderate. Recent behaviour matches the longer record: 0.38 over 1 year against 0.47 over 3. Stretching to 5 years gives 0.50, with an annualized covariance of 78.6 %².
Among the 111 assets we track against IEFA, XLP ranks #93 by 3-year correlation. The trailing year gives IEFA the advantage: +21.8% versus +8.3%, a 13.5-point spread. The rolling one-year correlation moved between 0.39 and 0.67 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 XLP: side by side
| IEFA (iShares Core MSCI EAFE ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.8% | +8.3% |
| 5-year return | +54.5% | +34.7% |
| Volatility (ann.) | 15.0% | 11.1% |
| Beta vs S&P 500 | 0.77 | 0.23 |
| Max drawdown (3Y) | -13.8% | -9.7% |
| Dividend yield | 3.35% | 2.58% |
| Expense ratio | 0.07% | 0.08% |
| Assets under management | $190.1B | $14.6B |
| Sector / category | ETF · International | Sector ETF |
On the fund side, IEFA sits in the Foreign Large Blend category at iShares, with $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between IEFA and XLP
The two portfolios are largely distinct, with 4 holdings in common adding up to 0.6% 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 XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%).
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 | XLP |
|---|---|---|
| 2022 | -15.2% | -0.8% |
| 2023 | +18.0% | -0.8% |
| 2024 | +3.3% | +12.2% |
| 2025 | +32.1% | +1.5% |
| 2026 | +14.5% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and XLP good diversifiers for each other?
Reasonably. At 0.47, IEFA and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between IEFA and XLP?
The IEFA/XLP correlation stands at 0.47 on a 3-year window (1 year: 0.38, 5 years: 0.50), computed from weekly returns as of 2026-08-27.
Is XLP a good diversifier for IEFA?
Reasonably. At 0.47, IEFA and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do IEFA and XLP overlap?
0.6% by weight, across 4 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Related comparisons
Hubs: IEFA correlations · XLP correlations
