Better International ETF: the iShares IEFA vs. State Street's SPDW
SPDW's ultra-low 0.03% expense ratio and 28.7% one-year return challenge IEFA's $196 billion scale and 3.3% yield.
The iShares Core MSCI EAFE ETF (IEFA) and State Street's SPDR Portfolio Developed World ex-US ETF (SPDW) are two popular options for international investors. IEFA boasts higher liquidity and yield, while SPDW offers a lower expense ratio and strong performance. Both provide broad exposure to developed markets outside the U.S. with around 2,000 stocks each.
IEFA, launched in 2012, has a 3.3% yield, while SPDW, launched in 2007, offers a 2.9% yield. Both funds employ similar sector allocations, with financial services, industrials, and technology each holding a significant portion. Key holdings include ASML Holding, HSBC Holdings, and Roche Holding in IEFA, and Samsung, SK Hynix Inc, and ASML Holding in SPDW.
IEFA's higher AUM provides greater liquidity, while SPDW's lower expense ratio makes it a cost-effective choice. However, IEFA's superior one-year return and larger AUM make it a strong contender. Investors should consider factors like sector exposure, sector leaders, and expense ratios when deciding between the two ETFs.
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