When it comes to picking between the Vanguard Total World Stock ETF (VT -0.17%) and the iShares Core MSCI EAFE ETF (IEFA -0.95%), the decision largely hinges on how broadly an investor wants their international exposure.
VT serves as a more expansive option, incorporating U.S. stocks alongside emerging markets, whereas IEFA strictly targets established economies outside North America. Let’s explore some key comparisons.
Snapshot (cost & size)
| Metric | IEFA | VT |
|---|---|---|
| Issuer | iShares | Vanguard |
| Share price (as of Sept. 18, 2026) | $97.76 | $158.04 |
| Expense ratio | 0.07% | 0.06% |
| 1-yr return (as of Sept. 18, 2026) | 17.8% | 18.2% |
| Dividend yield | 3.29% | 1.55% |
| Beta (5Y monthly) | 0.89 | 0.98 |
| Assets under management (AUM) | $194.4 billion | $101.7 billion |
Beta is a measure of price volatility relative to the S&P 500 and is calculated from monthly returns over the available fund history (up to five years). The one-year return reflects total return over the last 12 months, while the dividend yield indicates the trailing 12-month distribution yield.
Both of these funds are quite budget-friendly for long-term investors, but VT’s expense ratio is slightly lower. On the income front, however, IEFA stands out with a notably higher dividend yield.
Performance & risk comparison
| Metric | IEFA | VT |
|---|---|---|
| Max drawdown (5 yr) | -30.4% | -26.4% |
| Growth of $1,000 over 5 years (total return) | $1,521 | $1,675 |
What’s inside
VT has a vast array of holdings—over 10,000—as it aims to replicate the FTSE Global All Cap Index. This fund leans heavily towards technology, which makes up about 30% of its sector weight. Key holdings include Nvidia, Apple, and Microsoft. Launched in 2008, VT has distributed $2.41 per share in dividends in the past year.
Conversely, IEFA opts for a more selective methodology, holding 2,629 stocks from developed markets outside of North America and tracking the MSCI EAFE IMI Index. Financials dominate its portfolio with around 24% of assets, while tech contributes only 11%. Its principal holdings feature ASML, HSBC Holdings, and Roche Holding AG. This fund has been around since 2012 and has paid out $3.29 per share in dividends over the last year.
Which looks like the better buy
Both VT and IEFA deliver solid international diversity, yet their focus varies in terms of sectors and geography.
By not including North American stocks, IEFA inherently offers less exposure to large-cap tech firms compared to VT. Approximately 25% of its portfolio is allocated to Japanese stocks, with the UK representing 14% and France 9%. In contrast, VT dedicates around 65% of its portfolio to North American equities.
However, these differences in sectors and regions do not seem to have significantly impacted their risk profiles or overall performance. Both funds exhibit comparable betas and maximum drawdowns, indicating similar levels of volatility over the past five years. While VT has marginally outperformed IEFA in one-year and five-year total returns, the variations are relatively minor.
Ultimately, the choice between these two funds hinges on what specific gaps investors need to address in their portfolios. Those looking for widespread diversification might favor VT’s extensive coverage of developed and emerging markets, whereas IEFA could be more appealing for those wanting to invest in stocks beyond North America.
