VEA vs. ESGD

Last updated Jun 25, 2026

VEA (Vanguard FTSE Developed Markets ETF) and ESGD (iShares ESG Aware MSCI EAFE ETF) are both Foreign Large Cap Equities funds - VEA tracks the FTSE Developed All Cap ex US Index while ESGD tracks the MSCI EAFE Extended ESG Focus Index. Both are passively managed. Over the past 5 years, VEA returned 9.47%/yr vs 8.05%/yr for ESGD. With a 0.97 correlation, they move nearly in lockstep. VEA charges 0.03%/yr vs 0.20%/yr for ESGD.

Performance

VEA vs. ESGD - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Developed Markets ETF (VEA) and iShares ESG Aware MSCI EAFE ETF (ESGD). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VEA achieves a 13.29% return, which is significantly higher than ESGD's 8.13% return.

VEA

• 1D: 0.16%
• 1M: 0.27%
• YTD: 13.29%
• 6M: 12.91%
• 1Y: 28.78%
• 3Y*: 19.54%
• 5Y*: 9.47%
• 10Y*: 10.74%

ESGD

• 1D: -0.12%
• 1M: 0.05%
• YTD: 8.13%
• 6M: 7.64%
• 1Y: 19.32%
• 3Y*: 16.04%
• 5Y*: 8.05%
• 10Y*: —

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

VEA vs. ESGD - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VEA Vanguard FTSE Developed Markets ETF	13.29%	35.16%	3.15%	17.93%	-15.34%	11.66%	9.71%	22.62%	-14.75%	26.42%
ESGD iShares ESG Aware MSCI EAFE ETF	8.13%	29.63%	3.95%	18.53%	-15.17%	11.79%	8.20%	23.12%	-13.33%	25.10%

Correlation

The correlation between VEA and ESGD is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.98
Correlation (3Y) Calculated over the trailing 3-year period	0.99
Correlation (5Y) Calculated over the trailing 5-year period	0.99
Correlation (All Time) Calculated using the full available price history since Jun 30, 2016	0.97

The correlation between VEA and ESGD has been stable across timeframes, ranging from 0.97 to 0.99 - a consistent structural relationship.

VEA vs. ESGD - Sectors Allocation Comparison

Sectors	VEA	ESGD
Financial Services	22.3%	26.6%
Industrials	17.5%	18.4%
Technology	16.6%	13.2%
Healthcare	7.6%	9.5%
Basic Materials	7.5%	5.6%
Consumer Cyclical	7.4%	6.6%
Consumer Defensive	5.5%	6.8%
Energy	4.7%	3.4%
Communication Services	3.2%	4.2%
Utilities	3.0%	3.6%
Real Estate	2.5%	1.6%

Return for Risk

VEA vs. ESGD — Risk / Return Rank

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

VEA

VEA Risk / Return Rank: 57
VEA Sharpe Ratio Rank: 56
VEA Sortino Ratio Rank: 55
VEA Omega Ratio Rank: 57
VEA Calmar Ratio Rank: 56
VEA Martin Ratio Rank: 59

ESGD

ESGD Risk / Return Rank: 38
ESGD Sharpe Ratio Rank: 38
ESGD Sortino Ratio Rank: 38
ESGD Omega Ratio Rank: 37
ESGD Calmar Ratio Rank: 36
ESGD Martin Ratio Rank: 41

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.

VEA vs. ESGD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Developed Markets ETF (VEA) and iShares ESG Aware MSCI EAFE ETF (ESGD). 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.

	VEA	ESGD	Difference
Sharpe ratio: Return per unit of total volatility	1.73	1.23	+0.50
Sortino ratio: Return per unit of downside risk	2.38	1.80	+0.58
Omega ratio: Gain probability vs. loss probability	1.32	1.23	+0.09
Calmar ratio: Return relative to maximum drawdown	2.49	1.66	+0.82
Martin ratio: Return relative to average drawdown	9.55	6.19	+3.36

VEA vs. ESGD - Sharpe Ratio Comparison

The current VEA Sharpe Ratio is 1.73, which is higher than the ESGD Sharpe Ratio of 1.23. The chart below compares the historical Sharpe Ratios of VEA and ESGD, 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

VEA vs. ESGD - Drawdown Comparison

The maximum VEA drawdown since its inception was -60.68%, which is greater than ESGD's maximum drawdown of -33.70%. Use the drawdown chart below to compare losses from any high point for VEA and ESGD.

Drawdown Indicators

	VEA	ESGD	Difference
Max Drawdown Largest peak-to-trough decline	-60.68%	-33.70%	-26.98%
Max Drawdown (1Y) Largest decline over 1 year	-11.63%	-11.68%	+0.05%
Max Drawdown (3Y) Largest decline over 3 years	-13.45%	-13.86%	+0.41%
Max Drawdown (5Y) Largest decline over 5 years	-29.71%	-30.03%	+0.32%
Max Drawdown (10Y) Largest decline over 10 years	-35.73%	—	—
Current Drawdown Current decline from peak	-2.91%	-2.26%	-0.65%
Average Drawdown Average peak-to-trough decline	-13.26%	-6.16%	-7.10%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.02%	3.13%	-0.11%

Volatility

VEA vs. ESGD - Volatility Comparison

Vanguard FTSE Developed Markets ETF (VEA) has a higher volatility of 7.08% compared to iShares ESG Aware MSCI EAFE ETF (ESGD) at 5.48%. This indicates that VEA's price experiences larger fluctuations and is considered to be riskier than ESGD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VEA	ESGD	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.08%	5.48%	+1.60%
Volatility (6M) Calculated over the trailing 6-month period	14.73%	13.44%	+1.29%
Volatility (1Y) Calculated over the trailing 1-year period	16.78%	15.85%	+0.93%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.76%	16.71%	+0.05%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.20%	17.00%	+0.20%

VEA vs. ESGD - Expense Ratio Comparison

VEA has a 0.03% expense ratio, which is lower than ESGD's 0.20% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VEA vs. ESGD - Dividend Comparison

VEA's dividend yield for the trailing twelve months is around 2.58%, less than ESGD's 3.38% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ESGD iShares ESG Aware MSCI EAFE ETF	3.38%	3.60%	3.23%	3.02%	2.59%	2.75%	1.63%	2.57%	2.69%	2.65%	0.09%	0.00%
VEA Vanguard FTSE Developed Markets ETF	2.58%	3.22%	3.35%	3.15%	2.91%	3.16%	2.04%	3.04%	3.35%	2.77%	3.05%	2.92%

Frequently Asked Questions

Can I hold both VEA and ESGD in my portfolio?

With a correlation of 0.98, VEA and ESGD 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, VEA or ESGD?

VEA has higher volatility (7.08%) compared to ESGD (5.48%). In terms of maximum drawdown, VEA dropped -60.68% vs ESGD's -33.70%.

Which ETF is better, VEA or ESGD?

On 5-year performance, VEA leads with 9.47% vs 8.05% for ESGD. On fees, VEA is cheaper at 0.03% per year. On volatility, ESGD has been the lower-risk option at 5.48%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VEA or ESGD?

Over the 5-year period, VEA has performed better with a 9.47% return vs 8.05%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VEA or ESGD?

VEA is cheaper with a 0.03% expense ratio, compared with 0.20% for ESGD.

Which ETF pays a higher dividend yield, VEA or ESGD?

ESGD has the higher dividend yield at 3.38%, compared with 2.58% for VEA.

What is the main difference between VEA and ESGD?

VEA tracks FTSE Developed All Cap ex US Index, while ESGD tracks MSCI EAFE Extended ESG Focus Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.03% for VEA and 0.20% for ESGD.

Which has better risk-adjusted returns?

VEA currently has the higher Sharpe Ratio (1.73 vs 1.23), 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.