IEFA vs SPY: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and SPDR S&P 500 ETF Trust (SPY) show a strong relationship: their 3-year correlation of weekly returns is 0.75. By holdings, the two funds overlap 1.1% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and SPY?
On 3 years of weekly data the IEFA/SPY correlation comes out at 0.75, strong. Little has changed lately, as the 1-year reading of 0.74 lands near the 3-year figure. The 5-year figure is 0.79, and annualized covariance runs at 161.9 %².
Among the 111 assets we track against IEFA, SPY ranks #27 by 3-year correlation. Their 12-month results are close: +21.8% for IEFA against +20.6% for SPY. The link looks structural: the rolling one-year correlation barely moved, holding between 0.62 and 0.86.
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 SPY: side by side
| IEFA (iShares Core MSCI EAFE ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +21.8% | +20.6% |
| 5-year return | +54.5% | +82.4% |
| Volatility (ann.) | 15.0% | 14.5% |
| Beta vs S&P 500 | 0.77 | 1.00 |
| Max drawdown (3Y) | -13.8% | -18.8% |
| Dividend yield | 3.35% | 1.01% |
| Expense ratio | 0.07% | 0.09% |
| Assets under management | $190.1B | $795.3B |
| Sector / category | ETF · International | ETF · US Large Cap |
IEFA is a Foreign Large Blend fund from iShares: $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield. SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield.
Portfolio overlap between IEFA and SPY
The two portfolios are largely distinct. Weighing the shared positions, 1.1% of the two funds is identical, spread across 30 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in IEFA | Weight in SPY |
|---|---|---|
| BA | 0.31% | 0.25% |
| ALL | 0.09% | 0.10% |
| MRK | 0.08% | 0.57% |
| PRU | 0.17% | 0.06% |
| ROP | 1.22% | 0.06% |
| HBAN | 0.08% | 0.05% |
| EQT | 0.06% | 0.05% |
| ADM | 0.05% | 0.06% |
| DTE | 0.44% | 0.04% |
| DG | 0.25% | 0.04% |
| EL | 0.21% | 0.04% |
| TEL | 0.03% | 0.09% |
| AMP | 0.03% | 0.08% |
| TSCO | 0.15% | 0.03% |
| BG | 0.06% | 0.02% |
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), SAN (1.17%), NOVN (1.10%), NESN (0.97%). Only by SPY: NVDA (7.68%), AAPL (6.96%), MSFT (5.58%), AMZN (3.85%), GOOGL (3.03%).
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 | SPY |
|---|---|---|
| 2022 | -15.2% | -18.2% |
| 2023 | +18.0% | +26.2% |
| 2024 | +3.3% | +24.9% |
| 2025 | +32.1% | +17.7% |
| 2026 | +14.5% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and SPY good diversifiers for each other?
To a limited degree. At 0.75 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between IEFA and SPY?
The IEFA/SPY correlation stands at 0.75 on a 3-year window (1 year: 0.74, 5 years: 0.79), computed from weekly returns as of 2026-08-27.
Is SPY a good diversifier for IEFA?
To a limited degree. At 0.75 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do IEFA and SPY overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.1% by weight over 30 common positions.
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