Getting International Exposure in ETFs Isn't Always an Easy Choice. Is SPGM or IEFA the Better Buy for 2026?

State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) provides all-cap global exposure including the U.S., while iShares Core MSCI EAFE ETF (NYSEMKT:IEFA) focuses on developed international markets excluding North America.

Choosing between these two funds comes down to how much domestic exposure an investor wants in their portfolio. While the iShares fund isolates developed international stocks to complement U.S. holdings, the SPDR fund takes a "total world" approach. This analysis breaks down the differences in asset allocation and how they impact historical returns.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on July 20th.

The iShares fund is slightly more affordable with a 0.07% expense ratio, while the SPDR fund charges 0.09%. For income-focused investors, IEFA provides a significantly higher payout, yielding 3.4% compared to the 1.8% yield offered by SPGM.

Performance & risk comparison

What's inside

State Street SPDR Portfolio MSCI Global Stock Market ETF provides exposure to both developed and emerging markets worldwide, including the U.S., by tracking the MSCI ACWI IMI Index. It manages 2,927 holdings, and its largest positions include Nvidia Corp (NASDAQ:NVDA) at 4.3%, Apple Inc (NASDAQ:AAPL) at 3.7%, and Microsoft Corp (NASDAQ:MSFT) at 2.3%. The portfolio leans heavily into technology at 31%, with additional weight in financial services at 17% and industrials at 13%. It was launched in 2012. State Street SPDR Portfolio MSCI Global Stock Market ETF has paid $1.54 per share over the trailing 12 months, which on its recent ~$84.28 share price works out to a 1.8% yield.

iShares Core MSCI EAFE ETF focuses on developed economies in Europe, Australasia, and the Far East, excluding the U.S. and Canada. It holds 2,617 stocks and tracks the MSCI EAFE IMI Index. Its largest positions include ASML Holding at 3%, HSBC at 1.3%, and Roche at 1.2%. In contrast to the tech-heavy SPDR fund, IEFA is more concentrated in financial services at 23% and industrials at 20%, while technology accounts for just 13% of the fund. It was launched in 2012. iShares Core MSCI EAFE ETF has paid $3.29 per share over the trailing 12 months, which on its recent ~$95.57 share price works out to a 3.4% yield.

Which fund is the better buy?

SPGM, the State Street SPDR Portfolio MSCI Global Stock Market ETF, seeks to be one-stop shopping for investors wanting a global equity fund. That means the U.S. is 63% of holdings, given the country’s importance to the global stock market, with the developed world at 31% and emerging markets at 6%. Three-quarters of the fund is in large caps, with 16% in mid caps and the balance in small cap stocks.

Meanwhile, IEFA, the iShares Core MSCI EAFE ETF, largely forsakes the U.S. and emerging markets, with more than 98% of its portfolio in the developed world outside the U.S. That gives IEFA a very different geographic look than SPGM, with Japan the largest country represented, at 25% of holdings, followed by the U.K. at 14% and Switzerland at 9%. By comparison, no non-U.S. country is 6% or more of SPGM’s country-level exposure.

Performance-wise, the inclusion of the U.S. has been a real boon for SPGM. The fund has outperformed its ETF counterpart in every time frame, including the 3-year (20.2%), 5-year (11.4%), and 10-year (13.1%) look-backs. IEFA has returned annualized 16.6%, 8.8%, and 9.8% in the 3-, 5-, and 10-year time frames, respectively.

So based solely on performance, SPGM is hands down the winner. Yet if your portfolio already has U.S. exposure, you probably own many of the names that sit high in the weightings of SPGM’s portfolio. In that case, to get true non-U.S. equities exposure with a global flavor, IEFA should be your choice.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.