--- title: "IEFA vs. EFA: the cheaper fund is the one to hold" url: "https://etf.net/news/iefa-vs-efa-cheaper-fund-wins-2026-10-27" published_at: "2026-10-27T15:41:31.600Z" updated_at: "2026-10-27T15:41:31.600Z" byline: "ETF.net Research" --- # IEFA vs. EFA: the cheaper fund is the one to hold IEFA owns the same developed-market stocks as EFA, plus smaller companies, at 0.07% instead of 0.32%, and the 10-year record still favors the lower fee. By ETF.net Research. Published Oct 27, 2026. Hold BlackRock's iShares Core MSCI EAFE ETF, IEFA, not the older iShares MSCI EAFE ETF, EFA, if you want developed-market stocks outside the United States and Canada. Take EFA only if you want the large and mid-size stocks and not the smaller ones, or if you need an active options market on the position. IEFA charges **0.07%** a year. EFA charges **0.32%**. The gap is 0.25 percentage points, **$250** a year on every $100,000. Over the 10 years through Sept. 30, 2026, IEFA returned 9.09% a year and EFA returned 8.99%. Over five years EFA led, 9.30% a year against 9.04%, because its index led. ## The same large stocks, plus smaller ones Neither fund owns the United States, Canada or emerging markets. BlackRock launched IEFA on Oct. 18, 2012. EFA has tracked the original index since Aug. 14, 2001. EFA follows the MSCI EAFE Index, large and mid-size companies in 21 developed markets outside the United States and Canada. MSCI says that index covers about 85% of each country's publicly traded market value, as of Sept. 30. IEFA follows the MSCI EAFE IMI Index, those same markets with smaller companies added, and MSCI puts that coverage at about 99%. In the latest holdings files, nearly every stock in EFA is also in IEFA. IEFA keeps 85.2% of its assets in those shared companies and 14.2% in smaller companies EFA does not own. Cash and other balances are the rest, about 0.6% of each fund. ## The fee is most of the difference These are annualized total returns at net asset value through Sept. 30, 2026, from the [Core fund fact sheet](https://www.ishares.com/us/literature/fact-sheet/iefa-ishares-core-msci-eafe-etf-fund-fact-sheet-en-us.pdf) and the [original fund fact sheet](https://www.ishares.com/us/literature/fact-sheet/efa-ishares-msci-eafe-etf-fund-fact-sheet-en-us.pdf). Table: , IEFA, EFA Over three years the indexes finished 0.01 percentage points apart. The MSCI EAFE IMI Index, which IEFA tracks, returned 18.37% a year. The MSCI EAFE Index, which EFA tracks, returned 18.38%. IEFA returned 18.57% and EFA returned 18.30%. The cheaper fund led by 0.27 percentage points a year, about the size of the fee. IEFA beat its index after a 0.07% fee. EFA trailed its index by 0.08 percentage points, against a fee of 0.32 percentage points. iShares says these net indexes assume dividends are reinvested after the maximum foreign withholding tax, a rate often higher than the tax the fund pays. When that happens, iShares says, the index return is lower than a return at the fund's own tax rate. Over 10 years the broader index returned 8.91% a year and the large- and mid-cap index returned 9.06%. The broader index lagged by 0.15 percentage points a year, and IEFA still led by 0.10 percentage points, 9.09% against 8.99%. IEFA finished 0.18 percentage points ahead of its index after a 0.07% fee. EFA finished 0.07 percentage points behind its index after a 0.32% fee. Before those fees, both funds ran 0.25 percentage points a year ahead of their own net indexes. Over five years the large- and mid-cap index led by 0.53 percentage points a year, 9.32% against 8.79% for the broader index. EFA's lead was 0.26 percentage points a year. Over one year the funds finished 0.05 percentage points apart. On Sept. 30, the 30-day SEC yield, the Securities and Exchange Commission's standardized yield after the fund's fee, was 2.45% for IEFA and 2.20% for EFA. The gap matches the fee. ## When EFA is the fund to own Own EFA if you want large and mid-size companies only. Own it if you trade options on the fund. The market in IEFA is thin: on Oct. 26, MarketChameleon recorded 21 contracts traded, against a 30-day average of 48. EFA traded 10,319 contracts that day, and its 30-day average was 63,692. Buying the shares is not a reason to pay the higher fee. As of Oct. 26, iShares put the typical gap between the buying price and the selling price at 0.01% for both funds over the prior 30 days, on the [Core fund page](https://www.ishares.com/us/products/244049/ishares-core-msci-eafe-etf) and the [original fund page](https://www.ishares.com/us/products/239623/ishares-msci-eafe-etf). Over those 30 days, EFA traded 15.0 million shares a day and IEFA traded 10.5 million. For a personal account, either fund is easy to buy. iShares reported net assets of $189.0 billion in IEFA and $76.4 billion in EFA as of Oct. 26. Unless you need the options market, IEFA is the fund to hold. The fee is the part of the gap you can count on. The smaller companies have to lag by more than that fee to make EFA the better choice, and over the 10 years through Sept. 30 they did not. Source: etf.net, https://etf.net/news/iefa-vs-efa-cheaper-fund-wins-2026-10-27. Please cite the page URL.