IEFA vs XLU: Correlation & Overlap
How closely do iShares Core MSCI EAFE ETF (IEFA) and Utilities Select Sector SPDR Fund (XLU) trade together? Their weekly returns over three years give a correlation of 0.35, which is moderate. Looking through to holdings, 0.5% 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 XLU?
On 3 years of weekly data the IEFA/XLU correlation comes out at 0.35, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.19 versus 0.35 over 3 years. The 5-year figure is 0.41, and annualized covariance runs at 83.6 %².
Within IEFA's tracked universe of 111 assets, XLU comes in at #100 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months IEFA outperformed by 17.7 percentage points (+21.8% for IEFA against +4.1% for XLU). Across three years, the rolling one-year figure varied moderately, from 0.20 to 0.61.
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 XLU: side by side
| IEFA (iShares Core MSCI EAFE ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.8% | +4.1% |
| 5-year return | +54.5% | +46.3% |
| Volatility (ann.) | 15.0% | 15.8% |
| Beta vs S&P 500 | 0.77 | 0.26 |
| Max drawdown (3Y) | -13.8% | -13.1% |
| Dividend yield | 3.35% | 2.70% |
| Expense ratio | 0.07% | 0.08% |
| Assets under management | $190.1B | $23.1B |
| 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. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between IEFA and XLU
The two portfolios are largely distinct: 0.5% of the funds' weight sits in the same underlying holdings (2 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 XLU: NEE (12.94%), SO (7.45%), DUK (7.00%), CEG (6.58%), AEP (4.94%).
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 | XLU |
|---|---|---|
| 2022 | -15.2% | +1.4% |
| 2023 | +18.0% | -7.2% |
| 2024 | +3.3% | +23.3% |
| 2025 | +32.1% | +16.0% |
| 2026 | +14.5% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and XLU good diversifiers for each other?
Reasonably. At 0.35, IEFA and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between IEFA and XLU?
As of 2026-08-27, the correlation of weekly returns between IEFA and XLU is 0.35 over 3 years, 0.19 over 1 year and 0.41 over 5 years.
Is XLU a good diversifier for IEFA?
Reasonably. At 0.35, IEFA and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do IEFA and XLU overlap?
0.5% by weight, across 2 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/iefa-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: IEFA correlations · XLU correlations
