IEFA vs. DIA: What’s The Difference?

The iShares Core MSCI EAFE ETF (IEFA) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. IEFA is a iShares Foreign Large Blend fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between IEFA and DIA? And which fund is better?

The expense ratio of IEFA is 0.09 percentage points lower than DIA’s (0.07% vs. 0.16%). IEFA also has a lower exposure to the industrials sector and a lower standard deviation. Overall, IEFA has provided lower returns than DIA over the past ten years.

In this article, we’ll compare IEFA vs. DIA. We’ll look at risk metrics and industry exposure, as well as at their performance and holdings. Moreover, I’ll also discuss IEFA’s and DIA’s portfolio growth, fund composition, and annual returns and examine how these affect their overall returns.

Summary

IEFA DIA
Name iShares Core MSCI EAFE ETF SPDR Dow Jones Industrial Average ETF Trust
Category Foreign Large Blend Large Value
Issuer iShares SPDR State Street Global Advisors
AUM 95.78B 30.46B
Avg. Return 5.79% 13.35%
Div. Yield 2.28% 1.61%
Expense Ratio 0.07% 0.16%

The iShares Core MSCI EAFE ETF (IEFA) is a Foreign Large Blend fund that is issued by iShares. It currently has 95.78B total assets under management and has yielded an average annual return of 5.79% over the past 10 years. The fund has a dividend yield of 2.28% with an expense ratio of 0.07%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

IEFA’s dividend yield is 0.67% higher than that of DIA (2.28% vs. 1.61%). Also, IEFA yielded on average 7.57% less per year over the past decade (5.79% vs. 13.35%). The expense ratio of IEFA is 0.09 percentage points lower than DIA’s (0.07% vs. 0.16%).

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Fund Composition

Industry Exposure

IEFA vs. DIA - Industry Exposure

IEFA DIA
Technology 9.81% 17.32%
Industrials 16.32% 16.7%
Energy 3.19% 2.0%
Communication Services 5.53% 4.42%
Utilities 3.25% 0.0%
Healthcare 12.01% 17.92%
Consumer Defensive 9.78% 6.3%
Real Estate 4.31% 0.0%
Financial Services 15.91% 20.68%
Consumer Cyclical 11.96% 13.44%
Basic Materials 7.93% 1.21%

The iShares Core MSCI EAFE ETF (IEFA) has the most exposure to the Industrials sector at 16.32%. This is followed by Financial Services and Healthcare at 15.91% and 12.01% respectively. Utilities (3.25%), Real Estate (4.31%), and Communication Services (5.53%) only make up 13.09% of the fund’s total assets.

IEFA’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Technology, Consumer Cyclical, and Healthcare stocks at 7.93%, 9.78%, 9.81%, 11.96%, and 12.01%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

IEFA is 0.38% less exposed to the Industrials sector than DIA (16.32% vs 16.7%). IEFA’s exposure to Financial Services and Healthcare stocks is 4.77% lower and 5.91% lower respectively (15.91% vs. 20.68% and 12.01% vs. 17.92%). In total, Utilities, Real Estate, and Communication Services also make up 8.67% more of the fund’s holdings compared to DIA (13.09% vs. 4.42%).

Holdings

IEFA - Holdings

IEFA Holdings Weight
Nestle SA 1.77%
ASML Holding NV 1.43%
Roche Holding AG 1.31%
LVMH Moet Hennessy Louis Vuitton SE 1.08%
Novartis AG 1.0%
Toyota Motor Corp 0.92%
AstraZeneca PLC 0.78%
Unilever PLC 0.76%
AIA Group Ltd 0.74%
SAP SE 0.73%

IEFA’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 1.77%, 1.43%, 1.31%, 1.08%, and 1.0%.

Toyota Motor Corp (0.92%), AstraZeneca PLC (0.78%), and Unilever PLC (0.76%) have a slightly smaller but still significant weight. AIA Group Ltd and SAP SE are also represented in the IEFA’s holdings at 0.74% and 0.73%.

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

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Performance

Annual Returns

IEFA vs. DIA - Annual Returns

Year IEFA DIA
2020 8.55% 9.63%
2019 22.67% 25.09%
2018 -14.2% -3.6%
2017 26.42% 27.97%
2016 1.36% 16.28%
2015 0.53% 0.1%
2014 -4.82% 9.88%
2013 23.73% 29.41%
2012 0.0% 10.04%
2011 0.0% 8.21%
2010 0.0% 13.87%

IEFA had its best year in 2017 with an annual return of 26.42%. IEFA’s worst year over the past decade yielded -14.2% and occurred in 2018. In most years the iShares Core MSCI EAFE ETF provided moderate returns such as in 2010, 2015, and 2016 where annual returns amounted to 0.0%, 0.53%, and 1.36% respectively.

The year 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.

Portfolio Growth

IEFA vs. DIA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IEFA $10,000 $14,008 5.79%
DIA $10,000 $21,636 13.35%

A $10,000 investment in IEFA would have resulted in a final balance of $14,008. This is a profit of $4,008 over 7 years and amounts to a compound annual growth rate (CAGR) of 5.79%.

With a $10,000 investment in DIA, the end total would have been $21,636. This equates to a $11,636 profit over 7 years and a compound annual growth rate (CAGR) of 13.35%.

IEFA’s CAGR is 7.57 percentage points lower than that of DIA and as a result, would have yielded $7,628 less on a $10,000 investment. Thus, IEFA performed worse than DIA by 7.57% annually.


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