While IEFA is Bigger and SPDW Is More Affordable, There's 1 Subtle Difference Between These International ETFs
Key Points
IEFA has significantly more assets than SPDW.
SPDW is less expensive to own, while IEFA offers a modestly higher dividend yield.
Both funds have similar sector allocations and long-term risk profiles.
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SPDR Portfolio Developed World ex-US ETF (NYSEMKT:SPDW) and iShares Core MSCI EAFE ETF (NYSEMKT:IEFA) both provide broad international developed equity exposure, but differ in cost, size, and yield.
Both ETFs aim to capture developed markets outside the U.S, serving as core international holdings. SPDW tracks the S&P Developed Ex-U.S. BMI Index, while IEFA follows a similar approach but excludes Canada and boasts much larger assets under management. This comparison looks at their key differences for investors evaluating international diversification.
Snapshot (cost & size)
| Metric | SPDW | IEFA |
|---|---|---|
| Issuer | SPDR | IShares |
| Expense ratio | 0.03% | 0.07% |
| 1-yr return (as of 2025-12-12) | 26.6% | 16.0% |
| Dividend yield | 2.6% | 2.9% |
| Beta | 1.05 | 1.3 |
| AUM | $33.3 billion | $163.0 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
SPDW is more affordable with a lower expense ratio, while IEFA may appeal to those seeking a slightly higher yield and deeper liquidity due to its size. The fee gap is small, but IEFA’s higher payout could interest income-focused investors.
Performance & risk comparison
| Metric | SPDW | IEFA |
|---|---|---|
| Max drawdown (5 y) | -30.20% | -30.41% |
| Growth of $1,000 over 5 years | $1,335 | $1,330 |
What's inside
IEFA covers 2,600 developed-market stocks outside the U.S. and Canada, with a sector mix led by financial services (23%), industrials (20%), and healthcare (10%). Its largest positions are ASML, AstraZeneca, and Roche. With over 13 years of history and more than $160 billion in assets under management, IEFA stands out for its scale and trading liquidity.
SPDW takes a nearly identical sector approach, with its top allocations in financial services (23%), industrials (19%), and technology (11%). The largest holdings are ASML, Samsung, Roche, and AstraZeneca. SPDW offers slightly fewer holdings (2,410) but has a lower expense ratio.
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What this means for investors
While many of the largest and best companies are in the U.S., it's important for investors to add some international stocks to their portfolio to increase their diversification. IEFA and SPDW offer two pathways to add international exposure to your portfolio. IEFA is a bigger fund (by holdings and assets) and has a higher expense ratio.
For the most part, these funds are fairly identical. They even share many of the top holdings. However, there is one notable difference between these two funds other than size and cost. The IEFA excludes Canadian companies from its holdings, while SPDW holds our neighbors to the North. Canada has the third-highest geographical weighting in the fund at 11%. As a result, this fund provides even greater international exposure compared to IEFA.
For investors seeking the broadest international exposure at the lowest cost, SPDW stands out compared to IEFA in those two key areas.
Glossary
ETF: Exchange-traded fund; a pooled investment fund traded on stock exchanges like a stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Dividend yield: Annual dividends paid by a fund divided by its current share price, expressed as a percentage.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
Assets under management (AUM): The total market value of assets a fund or investment company manages on behalf of investors.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Developed markets: Countries with advanced economies, stable governments, and established financial markets, such as Japan, UK, and Germany.
Sector allocation: The distribution of a fund's investments across various industries or sectors.
Liquidity: How easily an asset or fund can be bought or sold in the market without affecting its price.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Index: A statistical measure representing a group of securities, used as a benchmark for fund performance.
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Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and AstraZeneca Plc. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.
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