EEM vs IEFA: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI Emerging Markets ETF (EEM) and iShares Core MSCI EAFE ETF (IEFA) carry a correlation of 0.79, a strong link. By holdings, the two funds overlap 0.4% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and IEFA?
Over the past 3 years, EEM and IEFA moved with a correlation of 0.79, which is strong. The relationship has been stable: the 1-year correlation (0.80) sits close to the 3-year figure. Over 5 years the correlation is 0.79, and the annualized covariance of weekly returns is 212.4 %².
Within EEM's tracked universe of 67 assets, IEFA comes in at #9 by 3-year correlation. Correlation aside, the last 12 months split them widely, with EEM ahead by 16.3 points (+38.1% versus +21.8%). Stability stands out here, with the rolling one-year correlation confined to 0.72 through 0.88.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
EEM vs IEFA: side by side
| EEM (iShares MSCI Emerging Markets ETF) | IEFA (iShares Core MSCI EAFE ETF) | |
|---|---|---|
| 1-year return | +38.1% | +21.8% |
| 5-year return | +47.1% | +54.5% |
| Volatility (ann.) | 18.0% | 15.0% |
| Beta vs S&P 500 | 0.85 | 0.77 |
| Max drawdown (3Y) | -17.3% | -13.8% |
| Dividend yield | 1.73% | 3.35% |
| Expense ratio | 0.72% | 0.07% |
| Assets under management | $29.2B | $190.1B |
| Sector / category | ETF · International | ETF · International |
On the fund side, EEM sits in the Diversified Emerging Mkts category at iShares, with $29.2B under management, 968 holdings, a 0.72% expense ratio, a 1.73% trailing dividend yield. IEFA, iShares's Foreign Large Blend fund, carries $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield.
Portfolio overlap between EEM and IEFA
The two portfolios are largely distinct, with 19 holdings in common adding up to 0.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in EEM | Weight in IEFA |
|---|---|---|
| DSY | 0.07% | 0.07% |
| VOD | 0.05% | 0.11% |
| SOL | 0.05% | 0.05% |
| 1801 | 0.16% | 0.04% |
| 2801 | 0.04% | 0.03% |
| 7203 | 0.03% | 0.69% |
| 2269 | 0.18% | 0.03% |
| AC | 0.02% | 0.04% |
| 6869 | 0.07% | 0.02% |
| 2327 | 0.21% | 0.01% |
| 2331 | 0.03% | 0.01% |
| 3231 | 0.14% | 0.01% |
| 2222 | 0.34% | 0.01% |
| TEL | 0.01% | 0.03% |
| 9987 | 0.13% | 0.01% |
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). Only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | EEM | IEFA |
|---|---|---|
| 2022 | -20.6% | -15.2% |
| 2023 | +8.9% | +18.0% |
| 2024 | +6.5% | +3.3% |
| 2025 | +34.0% | +32.1% |
| 2026 | +24.2% | +14.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and IEFA good diversifiers for each other?
To a limited degree. At 0.79 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between EEM and IEFA?
The EEM/IEFA correlation stands at 0.79 on a 3-year window (1 year: 0.80, 5 years: 0.79), computed from weekly returns as of 2026-08-27.
Is IEFA a good diversifier for EEM?
To a limited degree. At 0.79 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do EEM and IEFA overlap?
The two funds share 19 holdings amounting to 0.4% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/eem-vs-iefa.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/eem-vs-iefa/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EEM correlations · IEFA correlations
