EFA vs IWM: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI EAFE ETF (EFA) and iShares Russell 2000 ETF (IWM) carry a correlation of 0.69, a strong link. The two funds also share 1.3% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and IWM?
Across a 3-year window, the weekly returns of EFA and IWM correlate at 0.69, strong. Recent behaviour matches the longer record: 0.72 over 1 year against 0.69 over 3. Stretching to 5 years gives 0.75, with an annualized covariance of 204.5 %².
Among the 109 assets we track against EFA, IWM ranks #41 by 3-year correlation. The trailing year gives IWM the advantage: +21.9% versus +28.4%, a 6.5-point spread. On a rolling one-year basis the correlation drifted between 0.54 and 0.82, a moderate band.
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.
EFA vs IWM: side by side
| EFA (iShares MSCI EAFE ETF) | IWM (iShares Russell 2000 ETF) | |
|---|---|---|
| 1-year return | +21.9% | +28.4% |
| 5-year return | +56.7% | +41.5% |
| Volatility (ann.) | 14.9% | 19.8% |
| Beta vs S&P 500 | 0.77 | 1.06 |
| Max drawdown (3Y) | -14.1% | -27.5% |
| Dividend yield | 3.19% | 0.91% |
| Expense ratio | 0.32% | 0.19% |
| Assets under management | $78.0B | $80.1B |
| Sector / category | ETF · International | ETF · US Small & Mid Cap |
EFA, iShares's Foreign Large Blend fund, carries $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% trailing dividend yield. IWM, iShares's Small Blend fund, carries $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield.
Portfolio overlap between EFA and IWM
The two portfolios are largely distinct, with 23 holdings in common adding up to 1.3% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in EFA | Weight in IWM |
|---|---|---|
| AIR | 0.63% | 0.17% |
| ORA | 0.15% | 0.20% |
| UCB | 0.14% | 0.13% |
| MC | 0.58% | 0.12% |
| NG | 0.35% | 0.10% |
| ACA | 0.09% | 0.23% |
| MTX | 0.10% | 0.07% |
| TRN | 0.07% | 0.07% |
| FBK | 0.07% | 0.08% |
| SIG | 0.05% | 0.10% |
| NN | 0.10% | 0.05% |
| AI | 0.55% | 0.04% |
| CON | 0.04% | 0.13% |
| ENR | 0.60% | 0.04% |
| IDR | 0.02% | 0.02% |
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). Only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%).
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 | EFA | IWM |
|---|---|---|
| 2022 | -14.4% | -20.5% |
| 2023 | +18.4% | +16.8% |
| 2024 | +3.5% | +11.4% |
| 2025 | +31.5% | +12.7% |
| 2026 | +14.3% | +22.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and IWM good diversifiers for each other?
Only partially. A correlation of 0.69 means EFA and IWM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between EFA and IWM?
As of 2026-08-27, the correlation of weekly returns between EFA and IWM is 0.69 over 3 years, 0.72 over 1 year and 0.75 over 5 years.
Is IWM a good diversifier for EFA?
Only partially. A correlation of 0.69 means EFA and IWM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EFA and IWM overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.3% by weight over 23 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-iwm.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/efa-vs-iwm/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: EFA correlations · IWM correlations
