IEFA vs VT: Correlation & Overlap
Measured on weekly returns over the past three years, iShares Core MSCI EAFE ETF (IEFA) and Vanguard Total World Stock ETF (VT) carry a correlation of 0.88, a very strong link. Looking through to holdings, 23.5% 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 VT?
Over the past 3 years, IEFA and VT moved with a correlation of 0.88, which is very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.89 over 1 year against 0.88 over 3. Over 5 years the correlation is 0.91, and the annualized covariance of weekly returns is 183.5 %².
By 3-year correlation, VT places #4 of the 111 assets tracked against IEFA. Their 12-month results are close: +21.8% for IEFA against +22.7% for VT. The link looks structural: the rolling one-year correlation barely moved, holding between 0.81 and 0.95.
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 VT: side by side
| IEFA (iShares Core MSCI EAFE ETF) | VT (Vanguard Total World Stock ETF) | |
|---|---|---|
| 1-year return | +21.8% | +22.7% |
| 5-year return | +54.5% | +67.7% |
| Volatility (ann.) | 15.0% | 13.9% |
| Beta vs S&P 500 | 0.77 | 0.92 |
| Max drawdown (3Y) | -13.8% | -16.5% |
| Dividend yield | 3.35% | 1.59% |
| Expense ratio | 0.07% | 0.06% |
| Assets under management | $190.1B | $97.9B |
| Sector / category | ETF · International | ETF · Global |
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. VT is a Global Large-Stock Blend fund from Vanguard: $97.9B under management, 5308 holdings, a 0.06% expense ratio, a 1.59% trailing dividend yield.
Portfolio overlap between IEFA and VT
The two portfolios partially overlap: 23.5% of the funds' weight sits in the same underlying holdings (1581 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in IEFA | Weight in VT |
|---|---|---|
| ASML | 2.57% | 0.57% |
| HSBA | 1.35% | 0.33% |
| ROP | 1.22% | 0.28% |
| SAN | 1.17% | 0.27% |
| NOVN | 1.10% | 0.26% |
| SU | 0.72% | 0.24% |
| SHEL | 0.97% | 0.23% |
| NESN | 0.97% | 0.23% |
| AZN | 0.95% | 0.23% |
| BA | 0.31% | 0.22% |
| 8306 | 0.91% | 0.22% |
| SIE | 0.95% | 0.22% |
| BHP | 0.93% | 0.19% |
| CBA | 0.71% | 0.19% |
| 7203 | 0.69% | 0.18% |
Largest positions held only by IEFA: SE (0.17%), STMPA (0.12%), BIRG (0.08%), ESSITY B (0.06%), KOG (0.05%). Only by VT: NVDA (4.20%), AAPL (4.00%), MSFT (3.09%), AMZN (2.36%), GOOGL (1.89%).
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 | VT |
|---|---|---|
| 2022 | -15.2% | -18.0% |
| 2023 | +18.0% | +22.0% |
| 2024 | +3.3% | +16.5% |
| 2025 | +32.1% | +22.4% |
| 2026 | +14.5% | +15.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and VT good diversifiers for each other?
No. With a correlation of 0.88, IEFA and VT move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between IEFA and VT?
As of 2026-08-27, the correlation of weekly returns between IEFA and VT is 0.88 over 3 years, 0.89 over 1 year and 0.91 over 5 years.
Is VT a good diversifier for IEFA?
No. With a correlation of 0.88, IEFA and VT move nearly in lockstep, so holding both adds very little diversification.
How much do IEFA and VT overlap?
23.5% by weight, across 1581 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Related comparisons
Hubs: IEFA correlations · VT correlations
