EFA vs VEA: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI EAFE ETF (EFA) and Vanguard FTSE Developed Markets ETF (VEA) carry a correlation of 0.99, a very strong link. The two funds also share 68.6% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and VEA?
Over the past 3 years, EFA and VEA moved with a correlation of 0.99, which is very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.97 over 1 year against 0.99 over 3. Over 5 years the correlation is 0.99, and the annualized covariance of weekly returns is 222.4 %².
Few assets follow EFA as closely as VEA, which ranks #2 of 109 tracked partners. The trailing year gives VEA the advantage: +21.9% versus +28.5%, a 6.6-point spread. Stability stands out here, with the rolling one-year correlation confined to 0.97 through 1.00.
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 VEA: side by side
| EFA (iShares MSCI EAFE ETF) | VEA (Vanguard FTSE Developed Markets ETF) | |
|---|---|---|
| 1-year return | +21.9% | +28.5% |
| 5-year return | +56.7% | +63.5% |
| Volatility (ann.) | 14.9% | 15.1% |
| Beta vs S&P 500 | 0.77 | 0.79 |
| Max drawdown (3Y) | -14.1% | -13.5% |
| Dividend yield | 3.19% | 2.56% |
| Expense ratio | 0.32% | 0.03% |
| Assets under management | $78.0B | $314.9B |
| Sector / category | ETF · International | ETF · International |
On the fund side, EFA sits in the Foreign Large Blend category at iShares, with $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% trailing dividend yield. VEA is a Foreign Large Blend fund from Vanguard: $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield.
Portfolio overlap between EFA and VEA
The two portfolios overlap heavily: 68.6% of the funds' weight sits in the same underlying holdings (644 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in EFA | Weight in VEA |
|---|---|---|
| ASML | 2.99% | 2.00% |
| HSBA | 1.57% | 1.15% |
| ROP | 1.42% | 0.97% |
| SAN | 1.38% | 0.94% |
| NOVN | 1.28% | 0.92% |
| SU | 0.84% | 0.83% |
| NESN | 1.13% | 0.81% |
| SHEL | 1.14% | 0.81% |
| AZN | 1.11% | 0.80% |
| 8306 | 1.06% | 0.77% |
| SIE | 1.10% | 0.76% |
| BHP | 1.08% | 0.68% |
| CBA | 0.82% | 0.66% |
| 7203 | 0.81% | 0.64% |
| SAP | 0.97% | 0.62% |
Largest positions held only by EFA: SPOT (0.36%), SE (0.20%), NBIS (0.19%), STMPA (0.14%), AER (0.11%). Only by VEA: 005930 (2.53%), 000660 (1.98%), RY (0.92%), TD (0.63%), SHOP (0.45%).
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 | VEA |
|---|---|---|
| 2022 | -14.4% | -15.3% |
| 2023 | +18.4% | +17.9% |
| 2024 | +3.5% | +3.1% |
| 2025 | +31.5% | +35.2% |
| 2026 | +14.3% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and VEA good diversifiers for each other?
No. With a correlation of 0.99, EFA and VEA move nearly in lockstep, so holding both adds very little diversification. The 68.6% holdings overlap makes the redundancy concrete: much of it is the same book twice.
FAQ
What is the correlation between EFA and VEA?
The EFA/VEA correlation stands at 0.99 on a 3-year window (1 year: 0.97, 5 years: 0.99), computed from weekly returns as of 2026-08-27.
Is VEA a good diversifier for EFA?
No. With a correlation of 0.99, EFA and VEA move nearly in lockstep, so holding both adds very little diversification. The 68.6% holdings overlap makes the redundancy concrete: much of it is the same book twice.
How much do EFA and VEA overlap?
The two funds share 644 holdings amounting to 68.6% of weight, per issuer portfolio files dated 2026-08-26.
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Related comparisons
Hubs: EFA correlations · VEA correlations
