EFA vs. XLF

Last updated Jun 14, 2026

EFA (iShares MSCI EAFE ETF) and XLF (State Street Financial Select Sector SPDR ETF) are both exchange-traded funds - EFA is a Foreign Large Cap Equities fund tracking the MSCI EAFE Index (Net), while XLF is a Financials Equities fund tracking the Financial Select Sector Index. Both are passively managed. Over the past 10 years, EFA returned 9.84%/yr vs 13.33%/yr for XLF. A 0.69 correlation means they provide meaningful diversification when combined. EFA charges 0.32%/yr vs 0.08%/yr for XLF.

Performance

EFA vs. XLF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares MSCI EAFE ETF (EFA) and State Street Financial Select Sector SPDR ETF (XLF). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, EFA achieves a 9.36% return, which is significantly higher than XLF's -2.11% return. Over the past 10 years, EFA has underperformed XLF with an annualized return of 9.84%, while XLF has yielded a comparatively higher 13.33% annualized return.

EFA

• 1D: 0.28%
• 1M: 3.24%
• YTD: 9.36%
• 6M: 10.80%
• 1Y: 21.90%
• 3Y*: 16.14%
• 5Y*: 8.36%
• 10Y*: 9.84%

XLF

• 1D: 1.37%
• 1M: 4.38%
• YTD: -2.11%
• 6M: -2.09%
• 1Y: 8.41%
• 3Y*: 18.86%
• 5Y*: 9.15%
• 10Y*: 13.33%

*Multi-year figures are annualized to reflect compound growth (CAGR)

EFA vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
EFA iShares MSCI EAFE ETF	9.36%	31.55%	3.49%	18.36%	-14.39%	11.45%	7.60%	22.04%	-13.82%	25.07%
XLF State Street Financial Select Sector SPDR ETF	-2.11%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Correlation

The correlation between EFA and XLF is 0.51, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.51
Correlation (3Y) Calculated over the trailing 3-year period	0.55
Correlation (5Y) Calculated over the trailing 5-year period	0.65
Correlation (10Y) Calculated over the trailing 10-year period	0.64
Correlation (All Time) Calculated using the full available price history since Aug 17, 2001	0.69

The correlation between EFA and XLF shifts across timeframes, from 0.51 (1 year) to 0.69 (all time), reflecting how their relationship changes across market environments.

EFA vs. XLF - Sectors Allocation Comparison

Sectors	EFA	XLF
Financial Services	24.1%	98.0%
Industrials	18.9%	0.2%
Technology	12.1%	1.8%
Healthcare	10.1%	-
Consumer Cyclical	7.4%	-
Consumer Defensive	6.7%	-
Basic Materials	6.2%	-
Communication Services	4.6%	-
Energy	3.8%	-
Utilities	3.7%	-
Real Estate	1.6%	-

Return for Risk

EFA vs. XLF — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

EFA

EFA Risk / Return Rank: 42
EFA Sharpe Ratio Rank: 42
EFA Sortino Ratio Rank: 42
EFA Omega Ratio Rank: 41
EFA Calmar Ratio Rank: 40
EFA Martin Ratio Rank: 46

XLF

XLF Risk / Return Rank: 15
XLF Sharpe Ratio Rank: 17
XLF Sortino Ratio Rank: 15
XLF Omega Ratio Rank: 15
XLF Calmar Ratio Rank: 15
XLF Martin Ratio Rank: 15

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

EFA vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares MSCI EAFE ETF (EFA) and State Street Financial Select Sector SPDR ETF (XLF). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	EFA	XLF	Difference
Sharpe ratio: Return per unit of total volatility	1.31	0.42	+0.88
Sortino ratio: Return per unit of downside risk	1.91	0.67	+1.24
Omega ratio: Gain probability vs. loss probability	1.24	1.08	+0.16
Calmar ratio: Return relative to maximum drawdown	1.79	0.42	+1.37
Martin ratio: Return relative to average drawdown	6.67	1.08	+5.59

EFA vs. XLF - Sharpe Ratio Comparison

The current EFA Sharpe Ratio is 1.31, which is higher than the XLF Sharpe Ratio of 0.42. The chart below compares the historical Sharpe Ratios of EFA and XLF, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

EFA vs. XLF - Drawdown Comparison

The maximum EFA drawdown since its inception was -61.04%, smaller than the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for EFA and XLF.

Drawdown Indicators

	EFA	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-61.04%	-82.69%	+21.65%
Max Drawdown (1Y) Largest decline over 1 year	-11.42%	-14.79%	+3.37%
Max Drawdown (3Y) Largest decline over 3 years	-14.05%	-15.54%	+1.49%
Max Drawdown (5Y) Largest decline over 5 years	-29.53%	-25.81%	-3.72%
Max Drawdown (10Y) Largest decline over 10 years	-34.19%	-42.86%	+8.67%
Current Drawdown Current decline from peak	-0.61%	-4.94%	+4.33%
Average Drawdown Average peak-to-trough decline	-11.92%	-20.01%	+8.09%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.07%	5.76%	-2.69%

Volatility

EFA vs. XLF - Volatility Comparison

iShares MSCI EAFE ETF (EFA) has a higher volatility of 5.50% compared to State Street Financial Select Sector SPDR ETF (XLF) at 4.23%. This indicates that EFA's price experiences larger fluctuations and is considered to be riskier than XLF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	EFA	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.50%	4.23%	+1.27%
Volatility (6M) Calculated over the trailing 6-month period	13.19%	11.26%	+1.93%
Volatility (1Y) Calculated over the trailing 1-year period	15.64%	14.69%	+0.95%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.58%	18.66%	-2.08%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.27%	22.17%	-4.90%

EFA vs. XLF - Expense Ratio Comparison

EFA has a 0.32% expense ratio, which is higher than XLF's 0.08% expense ratio.

Dividends

EFA vs. XLF - Dividend Comparison

EFA's dividend yield for the trailing twelve months is around 3.09%, more than XLF's 1.49% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
EFA iShares MSCI EAFE ETF	3.09%	3.38%	3.24%	2.98%	2.69%	3.33%	2.13%	3.10%	3.39%	2.57%	3.07%	2.76%
XLF State Street Financial Select Sector SPDR ETF	1.49%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Frequently Asked Questions

Can I hold both EFA and XLF in my portfolio?

EFA and XLF have a correlation of 0.51, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, EFA or XLF?

EFA has higher volatility (5.50%) compared to XLF (4.23%). In terms of maximum drawdown, EFA dropped -61.04% vs XLF's -82.69%.

Which ETF is better, EFA or XLF?

On 10-year performance, XLF leads with 13.33% vs 9.84% for EFA. On fees, XLF is cheaper at 0.08% per year. On volatility, XLF has been the lower-risk option at 4.23%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, EFA or XLF?

Over the 10-year period, XLF has performed better with a 13.33% return vs 9.84%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, EFA or XLF?

XLF is cheaper with a 0.08% expense ratio, compared with 0.32% for EFA.

Which ETF pays a higher dividend yield, EFA or XLF?

EFA has the higher dividend yield at 3.09%, compared with 1.49% for XLF.

What is the main difference between EFA and XLF?

EFA is categorized as Foreign Large Cap Equities, while XLF is Financials Equities. EFA tracks MSCI EAFE Index (Net), while XLF tracks Financial Select Sector Index. They also come from different issuers: iShares and State Street. Their fees differ too: 0.32% for EFA and 0.08% for XLF.

Which has better risk-adjusted returns?

EFA currently has the higher Sharpe Ratio (1.31 vs 0.42), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.