IEFA vs IWM: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and iShares Russell 2000 ETF (IWM) show a strong relationship: their 3-year correlation of weekly returns is 0.70. The two funds also share 1.5% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and IWM?
Across a 3-year window, the weekly returns of IEFA and IWM correlate at 0.70, strong. The relationship has been stable: the 1-year correlation (0.73) sits close to the 3-year figure. Stretching to 5 years gives 0.75, with an annualized covariance of 206.6 %².
Among the 111 assets we track against IEFA, IWM ranks #37 by 3-year correlation. On 12-month performance IWM holds a 6.6-point edge, +21.8% against +28.4%. Across three years, the rolling one-year figure varied moderately, from 0.55 to 0.83.
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.
IEFA vs IWM: side by side
| IEFA (iShares Core MSCI EAFE ETF) | IWM (iShares Russell 2000 ETF) | |
|---|---|---|
| 1-year return | +21.8% | +28.4% |
| 5-year return | +54.5% | +41.5% |
| Volatility (ann.) | 15.0% | 19.8% |
| Beta vs S&P 500 | 0.77 | 1.06 |
| Max drawdown (3Y) | -13.8% | -27.5% |
| Dividend yield | 3.35% | 0.91% |
| Expense ratio | 0.07% | 0.19% |
| Assets under management | $190.1B | $80.1B |
| Sector / category | ETF · International | ETF · US Small & Mid Cap |
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. 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 IEFA and IWM
The two portfolios are largely distinct, with 47 holdings in common adding up to 1.5% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in IEFA | Weight in IWM |
|---|---|---|
| AIR | 0.54% | 0.17% |
| ORA | 0.13% | 0.20% |
| MC | 0.50% | 0.12% |
| UCB | 0.12% | 0.13% |
| NG | 0.30% | 0.10% |
| ACA | 0.08% | 0.23% |
| MTX | 0.09% | 0.07% |
| TRN | 0.06% | 0.07% |
| FBK | 0.06% | 0.08% |
| NN | 0.09% | 0.05% |
| AI | 0.47% | 0.04% |
| SIG | 0.04% | 0.10% |
| ENR | 0.52% | 0.04% |
| CON | 0.03% | 0.13% |
| IDR | 0.02% | 0.02% |
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%). 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 | IEFA | IWM |
|---|---|---|
| 2022 | -15.2% | -20.5% |
| 2023 | +18.0% | +16.8% |
| 2024 | +3.3% | +11.4% |
| 2025 | +32.1% | +12.7% |
| 2026 | +14.5% | +22.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and IWM good diversifiers for each other?
Only partially. A correlation of 0.70 means IEFA 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 IEFA and IWM?
Using weekly returns as of 2026-08-27: 0.70 over 3 years, with 0.73 over the last year and 0.75 over 5 years.
Is IWM a good diversifier for IEFA?
Only partially. A correlation of 0.70 means IEFA and IWM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IEFA and IWM overlap?
1.5% by weight, across 47 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-iwm.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/iefa-vs-iwm/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: IEFA correlations · IWM correlations
