The iShares Core MSCI EAFE ETF (IEFA) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. IEFA is a iShares Foreign Large Blend fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between IEFA and EFV? And which fund is better?
The expense ratio of IEFA is 0.32 percentage points lower than EFV’s (0.07% vs. 0.39%). IEFA also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IEFA has provided higher returns than EFV over the past ten years.
In this article, we’ll compare IEFA vs. EFV. We’ll look at fund composition and portfolio growth, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss IEFA’s and EFV’s performance, holdings, and risk metrics and examine how these affect their overall returns.
Summary
| IEFA | EFV | |
| Name | iShares Core MSCI EAFE ETF | iShares MSCI EAFE Value ETF |
| Category | Foreign Large Blend | Foreign Large Value |
| Issuer | iShares | iShares |
| AUM | 95.78B | 14.37B |
| Avg. Return | 5.79% | 3.99% |
| Div. Yield | 2.28% | 2.94% |
| Expense Ratio | 0.07% | 0.39% |
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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
IEFA’s dividend yield is 0.66% lower than that of EFV (2.28% vs. 2.94%). Also, IEFA yielded on average 1.79% more per year over the past decade (5.79% vs. 3.99%). The expense ratio of IEFA is 0.32 percentage points lower than EFV’s (0.07% vs. 0.39%).
Fund Composition
Industry Exposure
| IEFA | EFV | |
| Technology | 9.81% | 2.98% |
| Industrials | 16.32% | 11.6% |
| Energy | 3.19% | 6.6% |
| Communication Services | 5.53% | 6.46% |
| Utilities | 3.25% | 6.14% |
| Healthcare | 12.01% | 9.19% |
| Consumer Defensive | 9.78% | 6.82% |
| Real Estate | 4.31% | 5.06% |
| Financial Services | 15.91% | 26.55% |
| Consumer Cyclical | 11.96% | 9.0% |
| Basic Materials | 7.93% | 9.59% |
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 iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
IEFA is 4.72% more exposed to the Industrials sector than EFV (16.32% vs 11.6%). IEFA’s exposure to Financial Services and Healthcare stocks is 10.64% lower and 2.82% higher respectively (15.91% vs. 26.55% and 12.01% vs. 9.19%). In total, Utilities, Real Estate, and Communication Services also make up 4.57% less of the fund’s holdings compared to EFV (13.09% vs. 17.66%).
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%.
| EFV Holdings | Weight |
| Novartis AG | 2.41% |
| Toyota Motor Corp | 2.21% |
| Commonwealth Bank of Australia | 1.59% |
| Siemens AG | 1.45% |
| Sanofi SA | 1.42% |
| HSBC Holdings PLC | 1.4% |
| TotalEnergies SE | 1.35% |
| Allianz SE | 1.23% |
| GlaxoSmithKline PLC | 1.18% |
| Rio Tinto PLC | 1.1% |
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
Performance
Annual Returns
| Year | IEFA | EFV |
| 2020 | 8.55% | -2.78% |
| 2019 | 22.67% | 15.97% |
| 2018 | -14.2% | -14.88% |
| 2017 | 26.42% | 21.22% |
| 2016 | 1.36% | 4.87% |
| 2015 | 0.53% | -5.89% |
| 2014 | -4.82% | -5.65% |
| 2013 | 23.73% | 22.61% |
| 2012 | 0.0% | 17.52% |
| 2011 | 0.0% | -12.24% |
| 2010 | 0.0% | 3.18% |
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 EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEFA | $10,000 | $14,008 | 5.79% |
| EFV | $10,000 | $10,832 | 3.99% |
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 EFV, the end total would have been $10,832. This equates to a $832 profit over 7 years and a compound annual growth rate (CAGR) of 3.99%.
IEFA’s CAGR is 1.79 percentage points higher than that of EFV and as a result, would have yielded $3,176 more on a $10,000 investment. Thus, IEFA outperformed EFV by 1.79% annually.
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