The iShares MSCI EAFE ETF (EFA) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. EFA is a iShares Foreign Large Blend fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between EFA and IXUS? And which fund is better?
The expense ratio of EFA is 0.23 percentage points higher than IXUS’s (0.32% vs. 0.09%). EFA also has a lower exposure to the financial services sector and a higher standard deviation. Overall, EFA has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare EFA vs. IXUS. We’ll look at industry exposure and annual returns, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss EFA’s and IXUS’s performance, risk metrics, and holdings and examine how these affect their overall returns.
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Summary
| EFA | IXUS | |
| Name | iShares MSCI EAFE ETF | iShares Core MSCI Total International Stock ETF |
| Category | Foreign Large Blend | Foreign Large Blend |
| Issuer | iShares | iShares |
| AUM | 56.77B | 29.54B |
| Avg. Return | 6.47% | 6.09% |
| Div. Yield | 2.28% | 2.13% |
| Expense Ratio | 0.32% | 0.09% |
The iShares MSCI EAFE ETF (EFA) is a Foreign Large Blend fund that is issued by iShares. It currently has 56.77B total assets under management and has yielded an average annual return of 6.47% over the past 10 years. The fund has a dividend yield of 2.28% with an expense ratio of 0.32%.
The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.
EFA’s dividend yield is 0.15% higher than that of IXUS (2.28% vs. 2.13%). Also, EFA yielded on average 0.38% more per year over the past decade (6.47% vs. 6.09%). The expense ratio of EFA is 0.23 percentage points higher than IXUS’s (0.32% vs. 0.09%).
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Fund Composition
Industry Exposure
| EFA | IXUS | |
| Technology | 9.68% | 13.24% |
| Industrials | 15.01% | 12.78% |
| Energy | 3.51% | 4.39% |
| Communication Services | 5.68% | 7.09% |
| Utilities | 3.35% | 2.95% |
| Healthcare | 12.8% | 9.29% |
| Consumer Defensive | 10.56% | 8.19% |
| Real Estate | 3.01% | 3.66% |
| Financial Services | 16.88% | 17.34% |
| Consumer Cyclical | 11.62% | 12.57% |
| Basic Materials | 7.91% | 8.5% |
The iShares MSCI EAFE ETF (EFA) has the most exposure to the Financial Services sector at 16.88%. This is followed by Industrials and Healthcare at 15.01% and 12.8% respectively. Utilities (3.35%), Energy (3.51%), and Communication Services (5.68%) only make up 12.54% of the fund’s total assets.
EFA’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.91%, 9.68%, 10.56%, 11.62%, and 12.8%.
The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.
IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.
EFA is 0.46% less exposed to the Financial Services sector than IXUS (16.88% vs 17.34%). EFA’s exposure to Industrials and Healthcare stocks is 2.23% higher and 3.51% higher respectively (15.01% vs. 12.78% and 12.8% vs. 9.29%). In total, Utilities, Energy, and Communication Services also make up 1.89% less of the fund’s holdings compared to IXUS (12.54% vs. 14.43%).
Holdings
| EFA Holdings | Weight |
| Nestle SA | 2.11% |
| ASML Holding NV | 1.69% |
| Roche Holding AG | 1.55% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.28% |
| Novartis AG | 1.19% |
| Toyota Motor Corp | 1.09% |
| AstraZeneca PLC | 0.92% |
| Unilever PLC | 0.9% |
| AIA Group Ltd | 0.88% |
| SAP SE | 0.86% |
EFA’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.11%, 1.69%, 1.55%, 1.28%, and 1.19%.
Toyota Motor Corp (1.09%), AstraZeneca PLC (0.92%), and Unilever PLC (0.9%) have a slightly smaller but still significant weight. AIA Group Ltd and SAP SE are also represented in the EFA’s holdings at 0.88% and 0.86%.
| IXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.64% |
| Tencent Holdings Ltd | 1.35% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.34% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.06% |
| ASML Holding NV | 0.9% |
| Roche Holding AG | 0.81% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.67% |
| Novartis AG | 0.62% |
| Toyota Motor Corp | 0.59% |
IXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.
ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.
Risk Analysis
| EFA | IXUS | |
| Mean Return | 0.57 | 0 |
| R-squared | 96.78 | 0 |
| Std. Deviation | 15.01 | 0 |
| Alpha | 0.47 | 0 |
| Beta | 0.98 | 0 |
| Sharpe Ratio | 0.41 | 0 |
| Treynor Ratio | 5.33 | 0 |
The iShares MSCI EAFE ETF (EFA) has a Alpha of 0.47 with a Mean Return of 0.57 and a Beta of 0.98. Its Standard Deviation is 15.01 while EFA’s Sharpe Ratio is 0.41. Furthermore, the fund has a Treynor Ratio of 5.33 and a R-squared of 96.78.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Treynor Ratio of 0 with a Beta of 0 and a Mean Return of 0. Its Sharpe Ratio is 0 while IXUS’s R-squared is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
EFA’s Mean Return is 0.57 points higher than that of IXUS and its R-squared is 96.78 points higher. With a Standard Deviation of 15.01, EFA is slightly more volatile than IXUS. The Alpha and Beta of EFA are 0.47 points higher and 0.98 points higher than IXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | EFA | IXUS |
| 2020 | 7.92% | 11.14% |
| 2019 | 21.94% | 21.85% |
| 2018 | -13.83% | -14.55% |
| 2017 | 24.94% | 28.08% |
| 2016 | 0.96% | 4.66% |
| 2015 | -0.9% | -4.62% |
| 2014 | -5.04% | -3.96% |
| 2013 | 22.62% | 15.85% |
| 2012 | 17.22% | 0.0% |
| 2011 | -12.18% | 0.0% |
| 2010 | 7.52% | 0.0% |
EFA had its best year in 2017 with an annual return of 24.94%. EFA’s worst year over the past decade yielded -13.83% and occurred in 2018. In most years the iShares MSCI EAFE ETF provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 0.96%, 7.52%, and 7.92% respectively.
The year 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| EFA | $10,000 | $13,460 | 6.47% |
| IXUS | $10,000 | $14,209 | 6.09% |
A $10,000 investment in EFA would have resulted in a final balance of $13,460. This is a profit of $3,460 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.47%.
With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.
EFA’s CAGR is 0.38 percentage points higher than that of IXUS and as a result, would have yielded $749 less on a $10,000 investment. Thus, EFA outperformed IXUS by 0.38% annually.
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