🤝 BFF Take
VEA Wins on Cost and AUM — Both Are Excellent International Core Holdings
VEA (Vanguard FTSE Developed Markets ETF) and IEFA (iShares Core MSCI EAFE ETF) both provide exposure to developed international stock markets — Europe, Japan, Australia, Canada, and others — excluding the US. VEA tracks the FTSE Developed All Cap ex US index with ~3,900 stocks at 0.05%; IEFA tracks the MSCI EAFE IMI index with ~2,900 stocks at 0.07%. Both include Canada (unlike the original MSCI EAFE, which excluded Canada). VEA has significantly more assets ($120B vs IEFA's $95B) and a slightly lower fee. Both are appropriate as the international stock component of a three-fund or global portfolio. The choice often comes down to your brokerage — Vanguard investors tend to prefer VEA; iShares/Fidelity investors tend to prefer IEFA.
📋 Quick Takeaways
🌍Both hold ~3,000-4,000 stocks from Europe, Japan, Australia, Canada, and other developed markets
💰VEA costs 0.05% vs IEFA's 0.07% — both very cheap, VEA marginally lower fee
🏦VEA has $120B+ AUM vs IEFA's $95B — both large and liquid, VEA slightly more so
📊 Data-Based Take: VEA has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
VEA
Vanguard FTSE Developed Markets ETF
IEFA
iShares Core MSCI EAFE ETF
📋 VEA vs IEFA — Key Facts Side by Side
| Metric |
VEA |
IEFA |
| Fund Name |
Vanguard FTSE Developed Markets ETF |
iShares Core MSCI EAFE ETF |
| Issuer |
Vanguard |
iShares |
| Tracks Index |
FTSE Developed All Cap ex US |
MSCI EAFE IMI |
| Expense Ratio |
0.05% ✓ |
0.07% |
| Cost per $10K/yr |
$5.00 |
$7.00 |
| AUM |
$120B |
$95B |
| Holdings |
3,900 |
2,900 |
| Inception |
2007 |
2012 |
| 1-Year Return |
+12.80% |
+12.60% |
| 3-Year Return |
+7.20% |
+7.00% |
| 5-Year Return |
+9.40% |
+9.20% |
| Avg Bid-Ask Spread |
0.00% |
0.01% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 VEA vs IEFA — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy VEA or IEFA?
Choose if...
VEA
- You want the lowest fees — saves ~$2/yr per $10K vs IEFA
- You want geographic diversification beyond US stocks
Choose if...
IEFA
- You want geographic diversification beyond US stocks
- You already use iShares and prefer staying within their fund family
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❓ VEA vs IEFA — Frequently Asked Questions
What is the difference between VEA and IEFA?
VEA tracks the FTSE Developed All Cap ex US index (~3,900 stocks from 24 developed markets outside the US) at 0.05%. IEFA tracks the MSCI EAFE IMI index (~2,900 stocks) at 0.07%. Both include Canada, Europe, Japan, and Australia. The FTSE index used by VEA includes slightly more small and mid-cap stocks. Fee and AUM differences are the most practical distinctions — VEA is cheaper and larger.
Should I add international stocks to my portfolio?
International diversification is endorsed by most financial academics and practitioners. The US represents about 60% of global stock market capitalization — investing only in the US is a deliberate home country bias. International stocks have underperformed US stocks significantly over the past 15 years, but historical US outperformance is not guaranteed. Many investors hold 20-40% international exposure. If you own VTI, adding VEA or IEFA provides global diversification.
What countries are in VEA and IEFA?
Top country weights for both typically include Japan (~20%), UK (~15%), France (~9%), Canada (~8%), Germany (~7%), Switzerland (~6%), and Australia (~7%). Both are diversified across multiple European markets plus major Pacific economies. The composition is very similar between the two funds.
How does VEA compare to EFA (iShares MSCI EAFE)?
EFA is the older iShares international ETF charging 0.32% — significantly more expensive than both VEA (0.05%) and IEFA (0.07%). IEFA was launched specifically as the low-cost alternative to EFA. For long-term investors, EFA is difficult to recommend over IEFA or VEA due to its higher expense ratio. The only reason to hold EFA is existing positions with embedded capital gains.
Have international developed markets underperformed the US?
Yes, significantly over the past 10-15 years. The US market, driven by technology and innovation, dramatically outperformed international developed markets from roughly 2010-2024. However, from 2000-2010 international markets outperformed the US substantially. Market leadership rotates over long cycles — investors who maintain international exposure avoid betting that any one country or region will permanently dominate.
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ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.