IEFA vs SPY
IEFA vs SPY
iShares Core MSCI EAFE ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
IEFA has a lower expense ratio. SPY delivered stronger 1-year returns. IEFA offers more diversification with 1463 holdings.
Side-by-Side Comparison
| Metric | IEFA | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.07% | 0.09% | |
| AUM | $187.0B | $789.1B | |
| Dividend Yield | 3.40% | 1.01% | |
| Holdings | 2,645 | 505 | |
| YTD Return | +11.88% | +13.79% | |
| 1Y Return | +22.49% | +23.66% | |
| 3Y Return (annualized) | +17.58% | +21.40% | |
| 5Y Return (annualized) | +9.00% | +13.37% | |
| Volatility (annualized) | 14.4% | 15.3% | |
| Max Drawdown | -34.8% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Oct 18, 2012 | Jan 22, 1993 |
IEFA vs SPY Performance
iShares Core MSCI EAFE ETF (IEFA) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year IEFA returned +22.49% while SPY returned +23.66%. Year to date, IEFA is up 11.88% versus a gain of 13.79% for SPY.
Over three years, IEFA compounded at +17.58% per year against +21.40% for SPY; over five years the annualized figures are +9.00% and +13.37% respectively. Across the full 14-year window we track, SPY has the edge at +8.85% annualized vs +8.46%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 14.4% for IEFA. 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 -34.8% for IEFA and -56.5% for SPY. 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 0.82. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IEFA charges 0.07% per year while SPY charges 0.09%. On a $10,000 position that is $7 vs $9 annually, a gap of $2 per year that compounds over a long holding period. On income, IEFA currently yields 3.40% against 1.01% for SPY.
Holdings Overlap
IEFA and SPY share 4 holdings out of 1962 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
Frequently Asked Questions
Which is cheaper, IEFA or SPY?
IEFA has an expense ratio of 0.07% while SPY charges 0.09%. IEFA is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, IEFA or SPY?
Over the past year IEFA returned +22.49% vs +23.66% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (14 years), IEFA annualized +8.46% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, IEFA or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 14.4% for IEFA. Worst drawdown: IEFA -34.8% vs SPY -56.5%.
Should I hold both IEFA and SPY?
IEFA and SPY have a monthly-return correlation of 0.82, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IEFA and SPY?
IEFA and SPY share 4 common holdings with a 0.2% weight overlap. Combined, they hold 1962 unique securities.
Which pays a higher dividend, IEFA or SPY?
IEFA yields 3.40% while SPY yields 1.01%, so IEFA currently pays the higher dividend yield.
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