IEFA vs VNQ: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and Vanguard Real Estate ETF (VNQ) show a moderate relationship: their 3-year correlation of weekly returns is 0.56. The two funds also share 0.1% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and VNQ?
Over the past 3 years, IEFA and VNQ moved with a correlation of 0.56, which is moderate. Little has changed lately, as the 1-year reading of 0.50 lands near the 3-year figure. Over 5 years the correlation is 0.66, and the annualized covariance of weekly returns is 138.4 %².
Within IEFA's tracked universe of 111 assets, VNQ comes in at #76 by 3-year correlation. The trailing year gives IEFA the advantage: +21.8% versus +10.3%, a 11.5-point spread. Across three years, the rolling one-year figure varied moderately, from 0.45 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 VNQ: side by side
| IEFA (iShares Core MSCI EAFE ETF) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | +21.8% | +10.3% |
| 5-year return | +54.5% | +9.5% |
| Volatility (ann.) | 15.0% | 16.6% |
| Beta vs S&P 500 | 0.77 | 0.59 |
| Max drawdown (3Y) | -13.8% | -17.5% |
| Dividend yield | 3.35% | 3.51% |
| Expense ratio | 0.07% | 0.13% |
| Assets under management | $190.1B | $73.1B |
| Sector / category | ETF · International | ETF · Real Estate |
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. VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield.
Portfolio overlap between IEFA and VNQ
The two portfolios are largely distinct. Weighing the shared positions, 0.1% of the two funds is identical, spread across 7 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in IEFA | Weight in VNQ |
|---|---|---|
| LAND | 0.03% | 0.02% |
| ALX | 0.01% | 0.03% |
| EPR | 0.01% | 0.25% |
| DOC | 0.01% | 0.79% |
| FR | 0.01% | 0.46% |
| CWK | 0.01% | 0.16% |
| SAFE | 0.01% | 0.04% |
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%). Only by VNQ: VRTPX (14.54%), WELL (8.54%), PLD (7.04%), EQIX (5.25%), AMT (4.22%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 7 common positions shown.
Year-by-year returns
| Year | IEFA | VNQ |
|---|---|---|
| 2022 | -15.2% | -26.3% |
| 2023 | +18.0% | +11.9% |
| 2024 | +3.3% | +4.8% |
| 2025 | +32.1% | +3.2% |
| 2026 | +14.5% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and VNQ good diversifiers for each other?
Only partially. A correlation of 0.56 means IEFA and VNQ 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 VNQ?
As of 2026-08-27, the correlation of weekly returns between IEFA and VNQ is 0.56 over 3 years, 0.50 over 1 year and 0.66 over 5 years.
Is VNQ a good diversifier for IEFA?
Only partially. A correlation of 0.56 means IEFA and VNQ share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IEFA and VNQ overlap?
The two funds share 7 holdings amounting to 0.1% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-vnq.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iefa-vs-vnq/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: IEFA correlations · VNQ correlations
