IEFA vs MDY: Correlation & Overlap
How closely do iShares Core MSCI EAFE ETF (IEFA) and SPDR S&P MidCap 400 ETF (MDY) trade together? Their weekly returns over three years give a correlation of 0.73, which is strong. Looking through to holdings, 1.7% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and MDY?
Over the past 3 years, IEFA and MDY moved with a correlation of 0.73, which is strong. The relationship has been stable: the 1-year correlation (0.76) sits close to the 3-year figure. Over 5 years the correlation is 0.79, and the annualized covariance of weekly returns is 179.5 %².
By 3-year correlation, MDY places #35 of the 111 assets tracked against IEFA. Twelve-month performance is nearly a tie, at +21.8% for IEFA and +18.3% for MDY. On a rolling one-year basis the correlation drifted between 0.58 and 0.85, 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.
IEFA vs MDY: side by side
| IEFA (iShares Core MSCI EAFE ETF) | MDY (SPDR S&P MidCap 400 ETF) | |
|---|---|---|
| 1-year return | +21.8% | +18.3% |
| 5-year return | +54.5% | +47.5% |
| Volatility (ann.) | 15.0% | 16.5% |
| Beta vs S&P 500 | 0.77 | 0.91 |
| Max drawdown (3Y) | -13.8% | -24.0% |
| Dividend yield | 3.35% | 1.02% |
| Expense ratio | 0.07% | 0.23% |
| Assets under management | $190.1B | $26.5B |
| Sector / category | ETF · International | ETF · US Small & Mid Cap |
On the fund side, IEFA sits in the Foreign Large Blend category at iShares, with $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield. MDY, State Street Investment Management's Mid-Cap Blend fund, carries $26.5B under management, 400 holdings, a 0.23% expense ratio, a 1.02% trailing dividend yield.
Portfolio overlap between IEFA and MDY
The two portfolios are largely distinct. Weighing the shared positions, 1.7% of the two funds is identical, spread across 25 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in IEFA | Weight in MDY |
|---|---|---|
| CFR | 0.48% | 0.28% |
| AAL | 0.24% | 0.25% |
| ALV | 0.76% | 0.23% |
| CSL | 0.23% | 0.40% |
| G | 0.16% | 0.16% |
| ORA | 0.13% | 0.17% |
| NXT | 0.12% | 0.36% |
| SN | 0.04% | 0.37% |
| ORI | 0.03% | 0.26% |
| CAR | 0.03% | 0.07% |
| AM | 0.02% | 0.21% |
| PSN | 0.02% | 0.07% |
| BC | 0.01% | 0.14% |
| SHC | 0.01% | 0.14% |
| HLI | 0.01% | 0.19% |
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%). Only by MDY: TWLO (0.95%), P (0.94%), ILMN (0.93%), FTI (0.83%), ATI (0.80%).
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 | MDY |
|---|---|---|
| 2022 | -15.2% | -13.3% |
| 2023 | +18.0% | +16.1% |
| 2024 | +3.3% | +13.6% |
| 2025 | +32.1% | +7.2% |
| 2026 | +14.5% | +16.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and MDY good diversifiers for each other?
Only partially. A correlation of 0.73 means IEFA and MDY 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 MDY?
As of 2026-08-27, the correlation of weekly returns between IEFA and MDY is 0.73 over 3 years, 0.76 over 1 year and 0.79 over 5 years.
Is MDY a good diversifier for IEFA?
Only partially. A correlation of 0.73 means IEFA and MDY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IEFA and MDY overlap?
The two funds share 25 holdings amounting to 1.7% of weight, per issuer portfolio files dated 2026-08-26.
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Related comparisons
Hubs: IEFA correlations · MDY correlations
