VEA vs IEFA: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between VEA and IEFA

VEA (Vanguard FTSE Developed Markets ETF) is a international developed fund managed by Vanguard. VEA provides broad exposure to stocks in developed countries outside the United States, including companies in Europe, Japan, Australia, and Canada. With over 4,000 holdings, it is one of the most diversified international ETFs available. Beginners choose VEA to add international developed market exposure to their portfolios at an incredibly low cost of just 0.05%.

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.

The most notable differences are in fees (0.05% vs 0.07%), number of holdings (4,050 vs 2,850), and 5-year returns (6.50% vs 6.20%).

Holdings Overlap Analysis

VEA and IEFA share 67% 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 $170 on a $10,000 investment. VEA saves you more in fees over time.

Which One Should a Beginner Choose?

Choose VEA if: You want investors who want developed market international exposure without emerging markets, cost-conscious investors seeking the cheapest way to diversify outside the u.s., portfolio builders who want to pair vea with a separate emerging markets fund like vwo. It's managed by Vanguard with an expense ratio of 0.05%.

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%.

Can You Own Both VEA and IEFA?

With 67% 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