Which Is the Better International ETF, iShares' IEFA or State Street's SPGM?
Key Points
IEFA comes with a slightly lower expense ratio and a much higher dividend yield than SPGM.
SPGM has delivered a stronger one-year return and shallower five-year drawdowns than IEFA.
IEFA focuses on developed markets outside the U.S. and Canada, while SPGM covers global equities with a tech tilt.
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The State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) and the iShares Core MSCI EAFE ETF (NYSEMKT:IEFA) differ most in geographic coverage, yield, and recent performance, with SPGM leaning global and tech-heavy while IEFA targets developed markets outside North America and offers a higher payout.
Both SPGM and IEFA are low-cost, broad-market ETFs, but their exposures and characteristics set them apart. SPGM offers investors access to a globally diversified basket including both developed and emerging markets. IEFA hones in on developed markets outside the U.S. and Canada. This analysis breaks down how each ETF stacks up on cost, performance, risk, and portfolio construction.
Snapshot (cost & size)
| Metric | SPGM | IEFA |
|---|---|---|
| Issuer | SPDR | iShares |
| Expense ratio | 0.09% | 0.07% |
| 1-yr return (as of 2026-04-20) | 43.0% | 31.3% |
| Dividend yield | 1.8% | 3.5% |
| Beta | 0.92 | 0.81 |
| AUM | $1.5 billion | $178.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
IEFA is slightly more affordable on fees and delivers a notably higher yield, which may appeal to income-focused investors, while SPGM’s cost is only marginally higher.
Performance & risk comparison
| Metric | SPGM | IEFA |
|---|---|---|
| Max drawdown (5 y) | -25.92% | -30.41% |
| Growth of $1,000 over 5 years | $1,684 | $1,527 |
What's inside
IEFA holds 2,626 stocks spanning 23% financial services, 20% industrials, and 10% healthcare, and has been around for 13.5 years. Its largest positions include ASML Holdings, Astrazeneca, and HSBC Holdings, reflecting its focus on developed markets outside the U.S. and Canada.
SPGM, by contrast, covers 2,954 holdings across the globe, with a heavier tilt toward technology (25%), financial services (17%), and industrials (13%). Its top holdings — Nvidia, Apple, and Microsoft — underscore a strong U.S. tech presence. Neither fund has notable quirks, and both aim to offer broad, diversified market exposure.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Adding international stocks to a portfolio is a great way to boost returns, improving diversification and gaining exposure to high-growth markets outside the U.S. The State Street SPDR Portfolio MSCI Global Stock Market ETF (SPGM) and the iShares Core MSCI EAFE ETF (IEFA) provide this, but choosing between the two comes down to a few key differences.
IEFA is for investors who seek exposure to markets outside North America. This is truly an international-only fund, and advantages include a higher dividend yield and lower cost. It also offers far greater liquidity than SPGM with an AUM of nearly $180 billion. However, it holds currency risk against the U.S. dollar, and is more volatile, as demonstrated by its larger max drawdown over the past five years.
SPGM represents a global ETF since it encompasses both developed and emerging markets, including the U.S. This is for investors who want a mix of markets to maximize returns and reduce volatility. In exchange, you pay a higher cost and receive a lower dividend yield.
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HSBC Holdings is an advertising partner of Motley Fool Money. Robert Izquierdo has positions in ASML, Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends ASML, Apple, AstraZeneca Plc, Microsoft, and Nvidia. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.
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