XLB vs. EFA

Last updated Jun 13, 2026

XLB (Materials Select Sector SPDR ETF) and EFA (iShares MSCI EAFE ETF) are both exchange-traded funds - XLB is a Materials fund tracking the Materials Select Sector Index, while EFA is a Foreign Large Cap Equities fund tracking the MSCI EAFE Index (Net). Both are passively managed. Over the past 10 years, XLB returned 10.54%/yr vs 9.84%/yr for EFA. A 0.74 correlation means they provide meaningful diversification when combined. XLB charges 0.13%/yr vs 0.32%/yr for EFA.

Performance

XLB vs. EFA - Performance Comparison

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

Returns By Period

In the year-to-date period, XLB achieves a 15.57% return, which is significantly higher than EFA's 9.36% return. Over the past 10 years, XLB has outperformed EFA with an annualized return of 10.54%, while EFA has yielded a comparatively lower 9.84% annualized return.

XLB

• 1D: 1.87%
• 1M: 0.23%
• YTD: 15.57%
• 6M: 16.68%
• 1Y: 20.35%
• 3Y*: 10.88%
• 5Y*: 6.01%
• 10Y*: 10.54%

EFA

• 1D: 0.28%
• 1M: 1.15%
• YTD: 9.36%
• 6M: 10.80%
• 1Y: 20.34%
• 3Y*: 16.14%
• 5Y*: 8.36%
• 10Y*: 9.84%

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

XLB vs. EFA - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLB Materials Select Sector SPDR ETF	15.57%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%
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%

Correlation

The correlation between XLB and EFA is 0.67, 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	0.67
Correlation (3Y) Calculated over the trailing 3-year period	0.67
Correlation (5Y) Calculated over the trailing 5-year period	0.73
Correlation (10Y) Calculated over the trailing 10-year period	0.73
Correlation (All Time) Calculated using the full available price history since Aug 17, 2001	0.74

The correlation between XLB and EFA has been stable across timeframes, ranging from 0.67 to 0.74 - a consistent structural relationship.

XLB vs. EFA - Sectors Allocation Comparison

Sectors	XLB	EFA
Basic Materials	87.6%	5.9%
Consumer Cyclical	12.4%	7.6%
Industrials	1.5%	19.9%
Communication Services	-	4.5%
Consumer Defensive	-	6.7%
Energy	-	4.0%
Financial Services	-	24.6%
Healthcare	-	10.6%
Real Estate	-	1.9%
Technology	-	10.4%
Utilities	-	4.0%

Return for Risk

XLB vs. EFA — Risk / Return Rank

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

XLB

XLB Risk / Return Rank: 37
XLB Sharpe Ratio Rank: 37
XLB Sortino Ratio Rank: 37
XLB Omega Ratio Rank: 34
XLB Calmar Ratio Rank: 38
XLB Martin Ratio Rank: 37

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

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.

XLB vs. EFA - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Materials Select Sector SPDR ETF (XLB) and iShares MSCI EAFE ETF (EFA). 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.

	XLB	EFA	Difference
Sharpe ratio: Return per unit of total volatility	1.17	1.31	-0.14
Sortino ratio: Return per unit of downside risk	1.73	1.91	-0.18
Omega ratio: Gain probability vs. loss probability	1.20	1.24	-0.03
Calmar ratio: Return relative to maximum drawdown	1.65	1.79	-0.14
Martin ratio: Return relative to average drawdown	5.05	6.67	-1.62

XLB vs. EFA - Sharpe Ratio Comparison

The current XLB Sharpe Ratio is 1.17, which is comparable to the EFA Sharpe Ratio of 1.31. The chart below compares the historical Sharpe Ratios of XLB and EFA, 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

XLB vs. EFA - Drawdown Comparison

The maximum XLB drawdown since its inception was -59.83%, roughly equal to the maximum EFA drawdown of -61.04%. Use the drawdown chart below to compare losses from any high point for XLB and EFA.

Drawdown Indicators

	XLB	EFA	Difference
Max Drawdown Largest peak-to-trough decline	-59.83%	-61.04%	+1.21%
Max Drawdown (1Y) Largest decline over 1 year	-12.38%	-11.42%	-0.96%
Max Drawdown (3Y) Largest decline over 3 years	-23.17%	-14.05%	-9.12%
Max Drawdown (5Y) Largest decline over 5 years	-24.72%	-29.53%	+4.81%
Max Drawdown (10Y) Largest decline over 10 years	-37.27%	-34.19%	-3.08%
Current Drawdown Current decline from peak	-2.25%	-0.61%	-1.64%
Average Drawdown Average peak-to-trough decline	-10.83%	-11.92%	+1.09%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.04%	3.07%	+0.97%

Volatility

XLB vs. EFA - Volatility Comparison

Materials Select Sector SPDR ETF (XLB) has a higher volatility of 7.05% compared to iShares MSCI EAFE ETF (EFA) at 5.50%. This indicates that XLB's price experiences larger fluctuations and is considered to be riskier than EFA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLB	EFA	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.05%	5.50%	+1.55%
Volatility (6M) Calculated over the trailing 6-month period	13.58%	13.19%	+0.39%
Volatility (1Y) Calculated over the trailing 1-year period	17.49%	15.64%	+1.85%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.06%	16.58%	+2.48%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.70%	17.27%	+3.43%

XLB vs. EFA - Expense Ratio Comparison

XLB has a 0.13% expense ratio, which is lower than EFA's 0.32% expense ratio.

Dividends

XLB vs. EFA - Dividend Comparison

XLB's dividend yield for the trailing twelve months is around 1.68%, less than EFA's 3.09% 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%
XLB Materials Select Sector SPDR ETF	1.68%	1.92%	1.92%	2.00%	2.26%	1.62%	1.72%	1.98%	2.20%	1.66%	1.95%	2.24%

Frequently Asked Questions

Can I hold both XLB and EFA in my portfolio?

XLB and EFA have a correlation of 0.67, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLB or EFA?

XLB has higher volatility (7.05%) compared to EFA (5.50%). In terms of maximum drawdown, XLB dropped -59.83% vs EFA's -61.04%.

Which ETF is better, XLB or EFA?

On 10-year performance, XLB leads with 10.54% vs 9.84% for EFA. On fees, XLB is cheaper at 0.13% per year. On volatility, EFA has been the lower-risk option at 5.50%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLB or EFA?

Over the 10-year period, XLB has performed better with a 10.54% return vs 9.84%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLB or EFA?

XLB is cheaper with a 0.13% expense ratio, compared with 0.32% for EFA.

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

EFA has the higher dividend yield at 3.09%, compared with 1.68% for XLB.

What is the main difference between XLB and EFA?

XLB is categorized as Materials, while EFA is Foreign Large Cap Equities. XLB tracks Materials Select Sector Index, while EFA tracks MSCI EAFE Index (Net). They also come from different issuers: State Street and iShares. Their fees differ too: 0.13% for XLB and 0.32% for EFA.

Which has better risk-adjusted returns?

EFA currently has the higher Sharpe Ratio (1.31 vs 1.17), 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.