IEFA vs SPDW: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between IEFA and SPDW

IEFA (iShares Core MSCI EAFE ETF) is a international developed fund managed by BlackRock. IEFA tracks the MSCI EAFE index, covering developed market stocks in Europe, Australasia, and the Far East while excluding the U.S. and Canada. It is BlackRock's answer to Vanguard's VEA and offers similar broad international developed market exposure. Beginners who use an iShares-focused brokerage often choose IEFA as their primary international stock fund due to its low cost and massive asset base.

SPDW (SPDR Portfolio Developed World ex-US ETF) is a international developed fund managed by State Street Global Advisors. SPDW provides broad exposure to developed market stocks outside the United States at an ultra-low cost. It covers companies in Europe, Japan, Australia, and other developed economies. For beginners building a globally diversified portfolio, SPDW is one of the cheapest ways to add international developed market exposure.

The most notable differences are in fees (0.07% vs 0.03%), number of holdings (2,850 vs 2,500), and 5-year returns (6.20% vs 7.00%).

Holdings Overlap Analysis

IEFA and SPDW share 54% of their top holdings. There is moderate overlap, so owning both provides some additional diversification but with diminishing returns.

Cost Comparison Over Time

If you invest $10,000 and hold for 20 years (assuming 8% annual returns):

Over 20 years, the fee difference amounts to $342 on a $10,000 investment. SPDW saves you more in fees over time.

Which One Should a Beginner Choose?

Choose IEFA if: You want ishares platform users who want a core international developed markets allocation, investors who specifically want msci eafe exposure for benchmarking purposes, those building a tax-efficient international portfolio in taxable accounts. It's managed by BlackRock with an expense ratio of 0.07%.

Choose SPDW if: You want beginners building a globally diversified two- or three-fund portfolio, cost-conscious investors seeking the cheapest international equity exposure, long-term investors who want exposure to developed markets outside the u.s.. It's managed by State Street Global Advisors with an expense ratio of 0.03%.

Can You Own Both IEFA and SPDW?

With 54% holdings overlap, owning both means you're essentially doubling down on the same stocks. For beginners, we recommend picking one to keep things simple. If you want more diversification, consider pairing your choice with an international ETF like VXUS or a bond ETF like BND instead.

Frequently Asked Questions