IEFA vs VYM: Correlation & Overlap
Measured on weekly returns over the past three years, iShares Core MSCI EAFE ETF (IEFA) and Vanguard High Dividend Yield ETF (VYM) carry a correlation of 0.75, a strong link. By holdings, the two funds overlap 1.6% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and VYM?
On 3 years of weekly data the IEFA/VYM 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 0.75, and annualized covariance runs at 137.1 %².
Among the 111 assets we track against IEFA, VYM ranks #29 by 3-year correlation. Their 12-month results are close: +21.8% for IEFA against +21.1% for VYM. The link looks structural: the rolling one-year correlation barely moved, holding between 0.60 and 0.84.
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 VYM: side by side
| IEFA (iShares Core MSCI EAFE ETF) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +21.8% | +21.1% |
| 5-year return | +54.5% | +76.6% |
| Volatility (ann.) | 15.0% | 12.3% |
| Beta vs S&P 500 | 0.77 | 0.69 |
| Max drawdown (3Y) | -13.8% | -14.5% |
| Dividend yield | 3.35% | 2.24% |
| Expense ratio | 0.07% | 0.04% |
| Assets under management | $190.1B | $99.2B |
| Sector / category | ETF · International | ETF · Dividend |
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. VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield.
Portfolio overlap between IEFA and VYM
The two portfolios are largely distinct, with 52 holdings in common adding up to 1.6% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in IEFA | Weight in VYM |
|---|---|---|
| PRU | 0.17% | 0.17% |
| DTE | 0.44% | 0.12% |
| DG | 0.25% | 0.11% |
| ALL | 0.09% | 0.28% |
| EL | 0.21% | 0.08% |
| MRK | 0.08% | 1.31% |
| HBAN | 0.08% | 0.14% |
| TSCO | 0.15% | 0.07% |
| EQT | 0.06% | 0.13% |
| BG | 0.06% | 0.06% |
| ADM | 0.05% | 0.15% |
| APA | 0.04% | 0.05% |
| CFR | 0.48% | 0.04% |
| ALV | 0.76% | 0.04% |
| TIGO | 0.04% | 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 VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%).
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 | VYM |
|---|---|---|
| 2022 | -15.2% | -0.4% |
| 2023 | +18.0% | +6.6% |
| 2024 | +3.3% | +17.6% |
| 2025 | +32.1% | +15.4% |
| 2026 | +14.5% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and VYM good diversifiers for each other?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between IEFA and VYM?
Using weekly returns as of 2026-08-27: 0.75 over 3 years, with 0.74 over the last year and 0.75 over 5 years.
Is VYM a good diversifier for IEFA?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do IEFA and VYM overlap?
1.6% by weight, across 52 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: IEFA correlations · VYM correlations
