IEMG vs. IEFA

Last updated Jun 24, 2026

IEMG (iShares Core MSCI Emerging Markets ETF) and IEFA (iShares Core MSCI EAFE ETF) are both exchange-traded funds - IEMG is a Emerging Markets Diversified fund tracking the MSCI Emerging Markets Investable Market Index (USD) (Net), while IEFA is a Foreign Large Cap Equities fund tracking the MSCI EAFE IMI Index (Net). Both are passively managed. Over the past 10 years, IEMG returned 10.38%/yr vs 9.96%/yr for IEFA. A 0.78 correlation means they provide meaningful diversification when combined. IEMG charges 0.09%/yr vs 0.07%/yr for IEFA.

Performance

IEMG vs. IEFA - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Core MSCI Emerging Markets ETF (IEMG) and iShares Core MSCI EAFE ETF (IEFA). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, IEMG achieves a 21.95% return, which is significantly higher than IEFA's 8.47% return. Both investments have delivered pretty close results over the past 10 years, with IEMG having a 10.38% annualized return and IEFA not far behind at 9.96%.

IEMG

• 1D: -5.44%
• 1M: 1.74%
• YTD: 21.95%
• 6M: 22.64%
• 1Y: 43.66%
• 3Y*: 22.14%
• 5Y*: 7.05%
• 10Y*: 10.38%

IEFA

• 1D: -1.97%
• 1M: -0.19%
• YTD: 8.47%
• 6M: 8.11%
• 1Y: 22.09%
• 3Y*: 16.84%
• 5Y*: 8.24%
• 10Y*: 9.96%

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

IEMG vs. IEFA - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
IEMG iShares Core MSCI Emerging Markets ETF	21.95%	32.56%	6.50%	11.52%	-19.98%	-0.64%	17.87%	17.81%	-14.92%	37.38%
IEFA iShares Core MSCI EAFE ETF	8.47%	32.08%	3.26%	17.95%	-15.24%	11.63%	8.18%	22.64%	-14.14%	26.57%

Correlation

The correlation between IEMG and IEFA is 0.76, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.76
Correlation (3Y) Calculated over the trailing 3-year period	0.76
Correlation (5Y) Calculated over the trailing 5-year period	0.77
Correlation (10Y) Calculated over the trailing 10-year period	0.78
Correlation (All Time) Calculated using the full available price history since Oct 24, 2012	0.78

The correlation between IEMG and IEFA has been stable across timeframes, ranging from 0.76 to 0.78 - a consistent structural relationship.

IEMG vs. IEFA - Sectors Allocation Comparison

Sectors	IEMG	IEFA
Technology	42.1%	11.6%
Financial Services	16.7%	22.6%
Consumer Cyclical	8.5%	8.3%
Industrials	8.0%	20.1%
Basic Materials	6.3%	6.8%
Communication Services	5.6%	4.7%
Energy	3.3%	3.6%
Healthcare	3.2%	9.7%
Consumer Defensive	2.8%	6.2%
Utilities	1.9%	3.5%
Real Estate	1.6%	2.9%

Return for Risk

IEMG vs. IEFA — Risk / Return Rank

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

IEMG

IEMG Risk / Return Rank: 64
IEMG Sharpe Ratio Rank: 62
IEMG Sortino Ratio Rank: 55
IEMG Omega Ratio Rank: 66
IEMG Calmar Ratio Rank: 69
IEMG Martin Ratio Rank: 68

IEFA

IEFA Risk / Return Rank: 42
IEFA Sharpe Ratio Rank: 42
IEFA Sortino Ratio Rank: 42
IEFA Omega Ratio Rank: 42
IEFA Calmar Ratio Rank: 40
IEFA Martin Ratio Rank: 46

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.

IEMG vs. IEFA - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Core MSCI Emerging Markets ETF (IEMG) and iShares Core MSCI EAFE ETF (IEFA). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	IEMG	IEFA	Difference
Sharpe ratio: Return per unit of total volatility	1.98	1.43	+0.56
Sortino ratio: Return per unit of downside risk	2.56	2.06	+0.49
Omega ratio: Gain probability vs. loss probability	1.38	1.26	+0.12
Calmar ratio: Return relative to maximum drawdown	3.32	1.93	+1.39
Martin ratio: Return relative to average drawdown	12.15	7.34	+4.81

IEMG vs. IEFA - Sharpe Ratio Comparison

The current IEMG Sharpe Ratio is 1.98, which is higher than the IEFA Sharpe Ratio of 1.43. The chart below compares the historical Sharpe Ratios of IEMG and IEFA, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

IEMG vs. IEFA - Drawdown Comparison

The maximum IEMG drawdown since its inception was -38.71%, which is greater than IEFA's maximum drawdown of -34.78%. Use the drawdown chart below to compare losses from any high point for IEMG and IEFA.

Drawdown Indicators

	IEMG	IEFA	Difference
Max Drawdown Largest peak-to-trough decline	-38.71%	-34.78%	-3.93%
Max Drawdown (1Y) Largest decline over 1 year	-13.21%	-11.50%	-1.71%
Max Drawdown (3Y) Largest decline over 3 years	-17.21%	-13.76%	-3.45%
Max Drawdown (5Y) Largest decline over 5 years	-35.75%	-30.41%	-5.34%
Max Drawdown (10Y) Largest decline over 10 years	-38.71%	-34.78%	-3.93%
Current Drawdown Current decline from peak	-5.44%	-1.97%	-3.47%
Average Drawdown Average peak-to-trough decline	-12.93%	-6.67%	-6.26%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.61%	3.02%	+0.59%

Volatility

IEMG vs. IEFA - Volatility Comparison

iShares Core MSCI Emerging Markets ETF (IEMG) has a higher volatility of 12.22% compared to iShares Core MSCI EAFE ETF (IEFA) at 5.26%. This indicates that IEMG's price experiences larger fluctuations and is considered to be riskier than IEFA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	IEMG	IEFA	Difference
Volatility (1M) Calculated over the trailing 1-month period	12.22%	5.26%	+6.96%
Volatility (6M) Calculated over the trailing 6-month period	20.14%	13.22%	+6.92%
Volatility (1Y) Calculated over the trailing 1-year period	22.12%	15.55%	+6.57%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.99%	16.61%	+2.38%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.20%	17.07%	+3.13%

IEMG vs. IEFA - Expense Ratio Comparison

IEMG has a 0.09% expense ratio, which is higher than IEFA's 0.07% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

IEMG vs. IEFA - Dividend Comparison

IEMG's dividend yield for the trailing twelve months is around 2.21%, less than IEFA's 3.44% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IEFA iShares Core MSCI EAFE ETF	3.44%	3.55%	3.47%	3.20%	2.70%	3.32%	1.90%	3.18%	3.46%	2.57%	2.96%	2.63%
IEMG iShares Core MSCI Emerging Markets ETF	2.21%	2.75%	3.20%	2.89%	2.71%	3.06%	1.87%	3.15%	2.76%	2.35%	2.28%	2.53%

Frequently Asked Questions

Can I hold both IEMG and IEFA in my portfolio?

IEMG and IEFA have a correlation of 0.76, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, IEMG or IEFA?

IEMG has higher volatility (12.22%) compared to IEFA (5.26%). In terms of maximum drawdown, IEMG dropped -38.71% vs IEFA's -34.78%.

Which ETF is better, IEMG or IEFA?

On 10-year performance, IEMG leads with 10.38% vs 9.96% for IEFA. On fees, IEFA is cheaper at 0.07% per year. On volatility, IEFA has been the lower-risk option at 5.26%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, IEMG or IEFA?

Over the 10-year period, IEMG has performed better with a 10.38% return vs 9.96%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, IEMG or IEFA?

IEFA is cheaper with a 0.07% expense ratio, compared with 0.09% for IEMG.

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

IEFA has the higher dividend yield at 3.44%, compared with 2.21% for IEMG.

What is the main difference between IEMG and IEFA?

IEMG is categorized as Emerging Markets Diversified, while IEFA is Foreign Large Cap Equities. IEMG tracks MSCI Emerging Markets Investable Market Index (USD) (Net), while IEFA tracks MSCI EAFE IMI Index (Net). Their fees differ too: 0.09% for IEMG and 0.07% for IEFA.

Which has better risk-adjusted returns?

IEMG currently has the higher Sharpe Ratio (1.98 vs 1.43), 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.