While IEFA is Bigger and SPDW Is More Affordable, There's 1 Subtle Difference Between These International ETFs
Summarize this article with:
Explore how differences in fund scale, cost, and yield can shape your international ETF strategy.SPDR Portfolio Developed World ex-US ETF (SPDW +0.61%) and iShares Core MSCI EAFE ETF (IEFA +0.62%) 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)MetricSPDWIEFAIssuerSPDRISharesExpense ratio0.03%0.07%1-yr return (as of 2025-12-12)26.6%16.0%Dividend yield2.6%2.9%Beta1.051.3AUM$33.3 billion$163.0 billionBeta 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 comparisonMetricSPDWIEFAMax drawdown (5 y)-30.20%-30.41%Growth of $1,000 over 5 years$1,335$1,330What's insideIEFA 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.AdvertisementFor more guidance on ETF investing, check out the full guide at this link.What this means for investorsWhile 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. GlossaryETF: 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.Read NextNov 26, 2025 •By Jeff SantoroIEFA vs. SCHF: Lower Fee or Higher Dividend?Oct 23, 2025 •By Todd Shriber1 Incredible Reason to Buy IEFA's Stock in OctoberOct 23, 2025 •By Selena MaranjianCould Investing $1,000 in the iShares Core MSCI EAFE ETF (IEFA) Make You a Millionaire? (Spoiler: Yes, It Could.)Jul 13, 2025 •By James BrumleyThe Best ETF to Buy After the S&P 500's Record CloseDec 19, 2024 •By Keith Speights21% of Warren Buffett's "Secret" Portfolio Is Invested in These 3 ETFs.
Are They Great Picks for 2025?Nov 4, 2024 •By Reuben Gregg BreweriShares Core MSCI EAFE ETF: Your Gateway to International MarketsAbout the AuthorMatt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.TMFmd19X@MatthewDiLalloStocks MentionediShares Trust - iShares Core Msci Eafe ETFNYSEMKT: IEFA$88.85 (+0.01%) $+0.55SPDR Index Shares Funds - SPDR Portfolio Developed World ex-US ETFNYSEMKT: SPDW$44.78 (+0.01%) $+0.27*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.Advertisement