Overview
- Vanguard’s VXUS has outperformed iShares’ IEFA on year‑to‑date and multi‑year trailing returns, a lead tied to the stocks and countries each fund owns rather than their fees.
- Both ETFs charge roughly a 0.07% expense ratio, but VXUS follows the FTSE Global All Cap ex US Index and holds about 8,700 stocks while IEFA tracks the MSCI EAFE IMI Index and holds roughly 2,600 developed‑market names.
- Top holdings and sector tilts differ: VXUS is heavier in Taiwan Semiconductor, Samsung and other tech names and holds about 27% emerging‑market exposure, while IEFA is concentrated in eurozone firms such as ASML and banks with a large industrials weight.
- Those design differences create distinct near‑term risks and catalysts: VXUS is sensitive to China, Taiwan and oil‑price swings, while IEFA could benefit if European defense and industrial spending rises.
- For investors the choice is a tradeoff between chasing broader emerging‑market upside with higher geopolitical and commodity sensitivity or taking developed‑markets‑only exposure for a more eurozone‑and‑industrial tilt, which affects portfolio volatility and diversification.