IEFA vs VEA: Correlation & Overlap
How closely do iShares Core MSCI EAFE ETF (IEFA) and Vanguard FTSE Developed Markets ETF (VEA) trade together? Their weekly returns over three years give a correlation of 0.99, which is very strong. Looking through to holdings, 77.1% 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 VEA?
Over the past 3 years, IEFA and VEA moved with a correlation of 0.99, which is very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.98 lands near the 3-year figure. Over 5 years the correlation is 0.99, and the annualized covariance of weekly returns is 223.3 %².
VEA is one of the assets that tracks IEFA most closely: it ranks #2 out of the 111 assets we track against IEFA. Over the last 12 months VEA came out ahead by 6.7 percentage points (+21.8% against +28.5%). Stability stands out here, with the rolling one-year correlation confined to 0.98 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.
IEFA vs VEA: side by side
| IEFA (iShares Core MSCI EAFE ETF) | VEA (Vanguard FTSE Developed Markets ETF) | |
|---|---|---|
| 1-year return | +21.8% | +28.5% |
| 5-year return | +54.5% | +63.5% |
| Volatility (ann.) | 15.0% | 15.1% |
| Beta vs S&P 500 | 0.77 | 0.79 |
| Max drawdown (3Y) | -13.8% | -13.5% |
| Dividend yield | 3.35% | 2.56% |
| Expense ratio | 0.07% | 0.03% |
| Assets under management | $190.1B | $314.9B |
| Sector / category | ETF · International | ETF · International |
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. 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 IEFA and VEA
The two portfolios are near-duplicates, with 1574 holdings in common adding up to 77.1% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in IEFA | Weight in VEA |
|---|---|---|
| ASML | 2.57% | 2.00% |
| HSBA | 1.35% | 1.15% |
| ROP | 1.22% | 0.97% |
| SAN | 1.17% | 0.94% |
| NOVN | 1.10% | 0.92% |
| NESN | 0.97% | 0.81% |
| SHEL | 0.97% | 0.81% |
| AZN | 0.95% | 0.80% |
| 8306 | 0.91% | 0.77% |
| SIE | 0.95% | 0.76% |
| SU | 0.72% | 0.83% |
| BHP | 0.93% | 0.68% |
| CBA | 0.71% | 0.66% |
| 7203 | 0.69% | 0.64% |
| SAP | 0.83% | 0.62% |
Largest positions held only by IEFA: SPOT (0.31%), SE (0.17%), NBIS (0.16%), STMPA (0.12%), AER (0.09%). 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 | IEFA | VEA |
|---|---|---|
| 2022 | -15.2% | -15.3% |
| 2023 | +18.0% | +17.9% |
| 2024 | +3.3% | +3.1% |
| 2025 | +32.1% | +35.2% |
| 2026 | +14.5% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and VEA good diversifiers for each other?
No. With a correlation of 0.99, IEFA and VEA move nearly in lockstep, so holding both adds very little diversification. On top of that, 77.1% of their holdings are the same, making the doubling-up even more literal.
FAQ
What is the correlation between IEFA and VEA?
Using weekly returns as of 2026-08-27: 0.99 over 3 years, with 0.98 over the last year and 0.99 over 5 years.
Is VEA a good diversifier for IEFA?
No. With a correlation of 0.99, IEFA and VEA move nearly in lockstep, so holding both adds very little diversification. On top of that, 77.1% of their holdings are the same, making the doubling-up even more literal.
How much do IEFA and VEA overlap?
77.1% by weight, across 1574 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-vea.json
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Related comparisons
Hubs: IEFA correlations · VEA correlations
