EFA vs VEA
iShares MSCI EAFE ETF vs Vanguard FTSE Developed Markets ETF
Quick Verdict
VEA has a lower expense ratio. VEA delivered stronger 1-year returns. VEA offers more diversification with 3,918 holdings.
Side-by-Side Comparison
| Metric | EFA | VEA | Winner |
|---|---|---|---|
| Expense Ratio | 0.32% | 0.03% | |
| AUM | $80.2B | $230.3B | |
| Dividend Yield | 3.17% | 2.55% | |
| Holdings | 704 | 3,918 | |
| YTD Return | +13.90% | +17.57% | |
| 1Y Return | +22.32% | +29.08% | |
| 3Y Return (annualized) | +19.04% | +21.42% | |
| 5Y Return (annualized) | +9.64% | +10.52% | |
| Volatility (annualized) | 16.6% | 17.8% | |
| Max Drawdown | -60.0% | -62.9% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Aug 14, 2001 | Jul 20, 2007 |
EFA vs VEA Performance
iShares MSCI EAFE ETF (EFA) is a ETF from iShares by BlackRock (US) and Vanguard FTSE Developed Markets ETF (VEA) is a ETF from Vanguard (US). Over the past year EFA returned +22.32% while VEA returned +29.08%. Year to date, EFA is up 13.90% versus a gain of 17.57% for VEA.
Over three years, EFA compounded at +19.04% per year against +21.42% for VEA; over five years the annualized figures are +9.64% and +10.52% respectively. Across the full 19-year window we track, EFA has the edge at +6.85% annualized vs +3.19%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VEA has been the more volatile fund, with annualized monthly volatility of 17.8% compared with 16.6% for EFA. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -60.0% for EFA and -62.9% for VEA. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.99. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
EFA charges 0.32% per year while VEA charges 0.03%. On a $10,000 position that is $32 vs $3 annually, a gap of $29 per year that compounds over a long holding period. On income, EFA currently yields 3.17% against 2.55% for VEA.
Holdings Overlap
EFA and VEA share 408 holdings out of 4007 unique holdings combined, representing a 42.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, EFA or VEA?
EFA has an expense ratio of 0.32% while VEA charges 0.03%. VEA is the cheaper option. On a $10,000 investment, that is $29 per year of difference.
Which performed better, EFA or VEA?
Over the past year EFA returned +22.32% vs +29.08% for VEA, so VEA leads on 1-year performance. Over the longest common window we track (19 years), EFA annualized +6.85% vs +3.19% for VEA. Past performance does not guarantee future results.
Which is riskier, EFA or VEA?
VEA has been the more volatile fund at 17.8% annualized versus 16.6% for EFA. Worst drawdown: EFA -60.0% vs VEA -62.9%.
Should I hold both EFA and VEA?
EFA and VEA have a monthly-return correlation of 0.99, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between EFA and VEA?
EFA and VEA share 408 common holdings with a 42.1% weight overlap. Combined, they hold 4007 unique securities.
Which pays a higher dividend, EFA or VEA?
EFA yields 3.17% while VEA yields 2.55%, so EFA currently pays the higher dividend yield.
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