EFA vs SPY
EFA vs SPY
iShares MSCI EAFE ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. EFA delivered stronger 1-year returns. EFA offers more diversification with 645 holdings.
Side-by-Side Comparison
| Metric | EFA | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.32% | 0.09% | |
| AUM | $76.6B | $789.1B | |
| Dividend Yield | 3.24% | 1.01% | |
| Holdings | 704 | 505 | |
| YTD Return | +12.34% | +13.50% | |
| 1Y Return | +25.49% | +23.56% | |
| 3Y Return (annualized) | +17.50% | +21.17% | |
| 5Y Return (annualized) | +9.39% | +13.46% | |
| Volatility (annualized) | 16.6% | 15.3% | |
| Max Drawdown | -60.0% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Aug 14, 2001 | Jan 22, 1993 |
EFA vs SPY Performance
iShares MSCI EAFE ETF (EFA) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year EFA returned +25.49% while SPY returned +23.56%. Year to date, EFA is up 12.34% versus a gain of 13.50% for SPY.
Over three years, EFA compounded at +17.50% per year against +21.17% for SPY; over five years the annualized figures are +9.39% and +13.46% respectively. Across the full 25-year window we track, SPY has the edge at +8.85% annualized vs +6.80%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
EFA has been the more volatile fund, with annualized monthly volatility of 16.6% compared with 15.3% for SPY. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -60.0% for EFA and -56.5% for SPY. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
EFA charges 0.32% per year while SPY charges 0.09%. On a $10,000 position that is $32 vs $9 annually, a gap of $23 per year that compounds over a long holding period. On income, EFA currently yields 3.24% against 1.01% for SPY.
Holdings Overlap
EFA and SPY share 3 holdings out of 1145 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, EFA or SPY?
EFA has an expense ratio of 0.32% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $23 per year of difference.
Which performed better, EFA or SPY?
Over the past year EFA returned +25.49% vs +23.56% for SPY, so EFA leads on 1-year performance. Over the longest common window we track (25 years), EFA annualized +6.80% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, EFA or SPY?
EFA has been the more volatile fund at 16.6% annualized versus 15.3% for SPY. Worst drawdown: EFA -60.0% vs SPY -56.5%.
Should I hold both EFA and SPY?
EFA and SPY have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between EFA and SPY?
EFA and SPY share 3 common holdings with a 0.2% weight overlap. Combined, they hold 1145 unique securities.
Which pays a higher dividend, EFA or SPY?
EFA yields 3.24% while SPY yields 1.01%, so EFA currently pays the higher dividend yield.
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