EFA vs VWO: Correlation & Overlap
How closely do iShares MSCI EAFE ETF (EFA) and Vanguard FTSE Emerging Markets ETF (VWO) trade together? Their weekly returns over three years give a correlation of 0.81, which is very strong. By holdings, the two funds overlap 0.5% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and VWO?
On 3 years of weekly data the EFA/VWO correlation comes out at 0.81, very strong, meaning they move nearly in lockstep. The relationship has been stable: the 1-year correlation (0.88) sits close to the 3-year figure. The 5-year figure is 0.79, and annualized covariance runs at 183.5 %².
Among the 109 assets we track against EFA, VWO ranks #12 by 3-year correlation. Twelve-month performance is nearly a tie, at +21.9% for EFA and +21.6% for VWO. The link looks structural: the rolling one-year correlation barely moved, holding between 0.66 and 0.89.
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 VWO: side by side
| EFA (iShares MSCI EAFE ETF) | VWO (Vanguard FTSE Emerging Markets ETF) | |
|---|---|---|
| 1-year return | +21.9% | +21.6% |
| 5-year return | +56.7% | +38.2% |
| Volatility (ann.) | 14.9% | 15.2% |
| Beta vs S&P 500 | 0.77 | 0.75 |
| Max drawdown (3Y) | -14.1% | -17.4% |
| Dividend yield | 3.19% | 2.36% |
| Expense ratio | 0.32% | 0.06% |
| Assets under management | $78.0B | $162.0B |
| Sector / category | ETF · International | ETF · International |
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. On the fund side, VWO sits in the Diversified Emerging Mkts category at Vanguard, with $162.0B under management, 4113 holdings, a 0.06% expense ratio, a 2.36% trailing dividend yield.
Portfolio overlap between EFA and VWO
The two portfolios are largely distinct, with 25 holdings in common adding up to 0.5% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in EFA | Weight in VWO |
|---|---|---|
| DSY | 0.08% | 0.09% |
| 1801 | 0.05% | 0.19% |
| SOL | 0.05% | 0.08% |
| 7203 | 0.81% | 0.05% |
| VOD | 0.13% | 0.04% |
| BS6 | 0.04% | 0.08% |
| 1605 | 0.09% | 0.03% |
| 2801 | 0.03% | 0.06% |
| AC | 0.05% | 0.03% |
| TEL | 0.04% | 0.02% |
| EL | 0.25% | 0.02% |
| 6098 | 0.63% | 0.02% |
| 4004 | 0.08% | 0.01% |
| 7202 | 0.03% | 0.01% |
| 1802 | 0.05% | 0.01% |
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). Only by VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%).
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 | VWO |
|---|---|---|
| 2022 | -14.4% | -18.0% |
| 2023 | +18.4% | +9.3% |
| 2024 | +3.5% | +10.6% |
| 2025 | +31.5% | +25.6% |
| 2026 | +14.3% | +13.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and VWO good diversifiers for each other?
No: a correlation of 0.81 means EFA and VWO tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between EFA and VWO?
As of 2026-08-27, the correlation of weekly returns between EFA and VWO is 0.81 over 3 years, 0.88 over 1 year and 0.79 over 5 years.
Is VWO a good diversifier for EFA?
No: a correlation of 0.81 means EFA and VWO tend to fall together, which is precisely when diversification is supposed to help.
How much do EFA and VWO overlap?
0.5% by weight, across 25 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-vwo.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/efa-vs-vwo/)
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Related comparisons
Hubs: EFA correlations · VWO correlations
