EFA vs VYM
iShares MSCI EAFE ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. EFA delivered stronger 1-year returns. EFA offers more diversification with 704 holdings.
Side-by-Side Comparison
| Metric | EFA | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.32% | 0.04% | |
| AUM | $80.2B | $81.6B | |
| Dividend Yield | 3.17% | 2.24% | |
| Holdings | 704 | 616 | |
| YTD Return | +13.90% | +15.25% | |
| 1Y Return | +22.32% | +22.18% | |
| 3Y Return (annualized) | +19.04% | +18.83% | |
| 5Y Return (annualized) | +9.64% | +12.09% | |
| Volatility (annualized) | 16.6% | 14.6% | |
| Max Drawdown | -60.0% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Aug 14, 2001 | Nov 10, 2006 |
EFA vs VYM Performance
iShares MSCI EAFE ETF (EFA) is a ETF from iShares by BlackRock (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year EFA returned +22.32% while VYM returned +22.18%. Year to date, EFA is up 13.90% versus a gain of 15.25% for VYM.
Over three years, EFA compounded at +19.04% per year against +18.83% for VYM; over five years the annualized figures are +9.64% and +12.09% respectively. Across the full 20-year window we track, VYM has the edge at +7.03% annualized vs +6.85%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
EFA has been the more volatile fund, with annualized monthly volatility of 16.6% compared with 14.6% for VYM. 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 -58.8% for VYM. 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 0.84. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
EFA charges 0.32% per year while VYM charges 0.04%. On a $10,000 position that is $32 vs $4 annually, a gap of $28 per year that compounds over a long holding period. On income, EFA currently yields 3.17% against 2.24% for VYM.
Holdings Overlap
EFA and VYM share 4 holdings out of 1270 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, EFA or VYM?
EFA has an expense ratio of 0.32% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $28 per year of difference.
Which performed better, EFA or VYM?
Over the past year EFA returned +22.32% vs +22.18% for VYM, so EFA leads on 1-year performance. Over the longest common window we track (20 years), EFA annualized +6.85% vs +7.03% for VYM. Past performance does not guarantee future results.
Which is riskier, EFA or VYM?
EFA has been the more volatile fund at 16.6% annualized versus 14.6% for VYM. Worst drawdown: EFA -60.0% vs VYM -58.8%.
Should I hold both EFA and VYM?
EFA and VYM have a monthly-return correlation of 0.84, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between EFA and VYM?
EFA and VYM share 4 common holdings with a 0.3% weight overlap. Combined, they hold 1270 unique securities.
Which pays a higher dividend, EFA or VYM?
EFA yields 3.17% while VYM yields 2.24%, so EFA currently pays the higher dividend yield.
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