IEFA vs. VSS

Last updated Jun 4, 2026

IEFA (iShares Core MSCI EAFE ETF) and VSS (Vanguard FTSE All-World ex-US Small-Cap ETF) are both exchange-traded funds - IEFA is a Foreign Large Cap Equities fund tracking the MSCI EAFE IMI Index (Net), while VSS is a Foreign Small & Mid Cap Equities fund tracking the FTSE Global Small Cap ex US Index. Both are passively managed. Over the past 10 years, IEFA returned 9.22%/yr vs 8.07%/yr for VSS. Their correlation of 0.92 suggests significant overlap in exposure. Both charge a 0.07% expense ratio.

Performance

IEFA vs. VSS - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Core MSCI EAFE ETF (IEFA) and Vanguard FTSE All-World ex-US Small-Cap ETF (VSS). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, IEFA achieves a 8.85% return, which is significantly lower than VSS's 10.57% return. Over the past 10 years, IEFA has outperformed VSS with an annualized return of 9.22%, while VSS has yielded a comparatively lower 8.07% annualized return.

IEFA

• 1D: -0.78%
• 1M: 3.43%
• YTD: 8.85%
• 6M: 11.45%
• 1Y: 22.00%
• 3Y*: 16.72%
• 5Y*: 8.07%
• 10Y*: 9.22%

VSS

• 1D: -1.12%
• 1M: 1.27%
• YTD: 10.57%
• 6M: 13.10%
• 1Y: 27.32%
• 3Y*: 16.67%
• 5Y*: 5.76%
• 10Y*: 8.07%

*Multi-year figures are annualized to reflect compound growth (CAGR)

IEFA vs. VSS - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
IEFA iShares Core MSCI EAFE ETF	8.85%	32.08%	3.26%	17.95%	-15.24%	11.63%	8.18%	22.64%	-14.14%	26.57%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	10.57%	29.61%	2.94%	15.52%	-21.48%	13.05%	11.81%	21.36%	-18.48%	30.61%

Correlation

The correlation between IEFA and VSS is 0.90, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.90
Correlation (3Y) Calculated over the trailing 3-year period	0.92
Correlation (5Y) Calculated over the trailing 5-year period	0.93
Correlation (10Y) Calculated over the trailing 10-year period	0.93
Correlation (All Time) Calculated using the full available price history since Oct 25, 2012	0.92

The correlation between IEFA and VSS has been stable across timeframes, ranging from 0.90 to 0.93 - a consistent structural relationship.

IEFA vs. VSS - Sectors Allocation Comparison

Sectors	IEFA	VSS
Financial Services	22.5%	10.8%
Industrials	20.1%	18.7%
Technology	10.8%	13.3%
Healthcare	9.5%	6.2%
Consumer Cyclical	8.0%	9.3%
Basic Materials	7.0%	12.1%
Consumer Defensive	6.6%	3.4%
Communication Services	4.4%	2.3%
Energy	3.8%	4.9%
Utilities	3.6%	2.5%
Real Estate	3.0%	7.3%

Return for Risk

IEFA vs. VSS — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

IEFA

IEFA Risk / Return Rank: 41
IEFA Sharpe Ratio Rank: 41
IEFA Sortino Ratio Rank: 41
IEFA Omega Ratio Rank: 41
IEFA Calmar Ratio Rank: 38
IEFA Martin Ratio Rank: 44

VSS

VSS Risk / Return Rank: 51
VSS Sharpe Ratio Rank: 53
VSS Sortino Ratio Rank: 51
VSS Omega Ratio Rank: 54
VSS Calmar Ratio Rank: 47
VSS Martin Ratio Rank: 53

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

IEFA vs. VSS - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Core MSCI EAFE ETF (IEFA) and Vanguard FTSE All-World ex-US Small-Cap ETF (VSS). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	IEFA	VSS	Difference
Sharpe ratio: Return per unit of total volatility	1.48	1.85	-0.37
Sortino ratio: Return per unit of downside risk	2.14	2.54	-0.40
Omega ratio: Gain probability vs. loss probability	1.27	1.34	-0.07
Calmar ratio: Return relative to maximum drawdown	1.92	2.36	-0.44
Martin ratio: Return relative to average drawdown	7.34	9.13	-1.79
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

IEFA vs. VSS - Sharpe Ratio Comparison

The current IEFA Sharpe Ratio is 1.48, which is comparable to the VSS Sharpe Ratio of 1.85. The chart below compares the historical Sharpe Ratios of IEFA and VSS, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	IEFA	VSS	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.48	1.85	-0.37
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.49	0.35	+0.14
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.53	0.47	+0.07
Sharpe Ratio (All Time) Calculated using the full available price history	0.51	0.55	-0.04

Drawdowns

IEFA vs. VSS - Drawdown Comparison

The maximum IEFA drawdown since its inception was -34.78%, smaller than the maximum VSS drawdown of -43.51%. Use the drawdown chart below to compare losses from any high point for IEFA and VSS.

Drawdown Indicators

	IEFA	VSS	Difference
Max Drawdown Largest peak-to-trough decline	-34.78%	-43.51%	+8.73%
Max Drawdown (1Y) Largest decline over 1 year	-11.50%	-11.62%	+0.12%
Max Drawdown (3Y) Largest decline over 3 years	-13.76%	-15.73%	+1.97%
Max Drawdown (5Y) Largest decline over 5 years	-30.41%	-33.93%	+3.52%
Max Drawdown (10Y) Largest decline over 10 years	-34.78%	-43.51%	+8.73%
Current Drawdown Current decline from peak	-1.20%	-2.58%	+1.38%
Average Drawdown Average peak-to-trough decline	-6.69%	-9.64%	+2.95%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.01%	3.00%	+0.01%

Volatility

IEFA vs. VSS - Volatility Comparison

The current volatility for iShares Core MSCI EAFE ETF (IEFA) is 4.86%, while Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) has a volatility of 5.33%. This indicates that IEFA experiences smaller price fluctuations and is considered to be less risky than VSS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	IEFA	VSS	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.86%	5.33%	-0.47%
Volatility (6M) Calculated over the trailing 6-month period	12.42%	12.64%	-0.22%
Volatility (1Y) Calculated over the trailing 1-year period	14.96%	14.81%	+0.15%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.51%	16.46%	+0.05%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.30%	17.27%	+0.03%

IEFA vs. VSS - Expense Ratio Comparison

Both IEFA and VSS have an expense ratio of 0.07%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

IEFA vs. VSS - Dividend Comparison

IEFA's dividend yield for the trailing twelve months is around 3.26%, more than VSS's 3.07% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IEFA iShares Core MSCI EAFE ETF	3.26%	3.55%	3.47%	3.20%	2.70%	3.32%	1.90%	3.18%	3.46%	2.57%	2.96%	2.63%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	3.07%	3.39%	3.44%	3.14%	2.30%	2.74%	1.90%	3.25%	2.80%	2.83%	2.93%	2.66%

Frequently Asked Questions

Can I hold both IEFA and VSS in my portfolio?

With a correlation of 0.90, IEFA and VSS move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, IEFA or VSS?

VSS has higher volatility (5.33%) compared to IEFA (4.86%). In terms of maximum drawdown, IEFA dropped -34.78% vs VSS's -43.51%.

Which ETF is better, IEFA or VSS?

On 10-year performance, IEFA leads with 9.22% vs 8.07% for VSS. Both ETFs have the same 0.07% expense ratio. On volatility, IEFA has been the lower-risk option at 4.86%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, IEFA or VSS?

Over the 10-year period, IEFA has performed better with a 9.22% return vs 8.07%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, IEFA or VSS?

IEFA and VSS have the same expense ratio: 0.07% per year.

Which ETF pays a higher dividend yield, IEFA or VSS?

IEFA has the higher dividend yield at 3.26%, compared with 3.07% for VSS.

What is the main difference between IEFA and VSS?

IEFA is categorized as Foreign Large Cap Equities, while VSS is Foreign Small & Mid Cap Equities. IEFA tracks MSCI EAFE IMI Index (Net), while VSS tracks FTSE Global Small Cap ex US Index. They also come from different issuers: iShares and Vanguard.

Which has better risk-adjusted returns?

VSS currently has the higher Sharpe Ratio (1.85 vs 1.48), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.