What is the fundamental difference between the indices tracked by EFA and VEA?

EFA tracks the MSCI EAFE index, which includes developed markets excluding the US and Canada, focusing on Europe, Australasia, and the Far East. In contrast, VEA tracks the FTSE Developed Markets index, which provides comprehensive exposure to international developed equities including Canada. This distinction means VEA has a broader geographic scope. Investors should consider whether they prefer an index that omits Canadian markets or one that includes them alongside other developed nations.

How does the age of an ETF influence its structure and cost-efficiency?

EFA was launched on 14 August 2001, making it an older fund structure, while VEA launched on 20 July 2007. Newer funds like VEA often benefit from modern market innovations and competitive pricing pressures, contributing to lower expense ratios. However, age alone does not determine performance or quality. It is a factor in understanding why fee structures might differ, as earlier funds may have legacy costs or different operational models compared to newer entrants designed for cost efficiency.

What does it mean when sector weights are not available for comparison?

For both EFA and VEA, detailed sector weights are not available in the provided data. This limits the ability to immediately assess how concentrated each fund is in specific industries such as technology or healthcare. Without this transparency, investors must rely on the index methodology and general market knowledge to infer potential exposures. Lack of data prevents a direct, granular comparison of industry allocation between the two funds, requiring caution when evaluating risk diversification.

How do the expense ratios of EFA and VEA compare directly?

EFA has an expense ratio of 0.32%, whereas VEA has a significantly lower expense ratio of 0.03%. This results in a difference of 0.29 percentage points annually. For every £10,000 invested, EFA costs £32 per year in fees, while VEA costs only £3. Over time, this fee disparity can compound, potentially affecting net returns. Investors should weigh these costs against other factors like yield and index composition when evaluating long-term fee impact.

Do EFA and VEA hold the same top stocks?

Based on the shared top-10 holdings data, there are none among the listed top holdings for EFA and VEA. EFA's top holdings are not available, while VEA lists only SHOP at 0.54%. Consequently, it is impossible to confirm direct overlap in their largest positions using the provided figures. The absence of shared top holdings in the data suggests potential differences in index construction or constituent selection, although detailed holdings for EFA remain unspecified.

Which fund offers a higher dividend yield and what does this mean?

EFA offers a dividend yield of 3.16%, which is higher than VEA's yield of 2.35%. A higher yield may provide greater income generation for investors focused on cash flow from their holdings. However, yield is not the only metric; it may reflect different market compositions or index strategies. The 0.81 percentage point difference means EFA pays out more relative to its price. Yield-focused investors might find this aspect of EFA more attractive compared to the lower-yielding VEA.

How do net assets impact the liquidity of these ETFs?

VEA has net assets of £233.8 billion, substantially larger than EFA's £77.7 billion. Generally, higher net assets contribute to better liquidity and tighter bid-ask spreads, as seen in EFA's high liquidity due to its substantial assets. VEA also offers excellent liquidity and economies of scale due to its massive size. While both funds are liquid, VEA's larger asset base may offer advantages in trading volume stability and operational efficiency, reducing potential trading costs for large transactions.

How does the inclusion of Canada in VEA affect market exposure?

VEA includes Canadian equities in its FTSE Developed Markets index exposure, while EFA excludes Canada as part of the MSCI EAFE index methodology. This means VEA provides a slightly broader geographic coverage of developed markets. The inclusion of Canadian markets may introduce different economic and sector exposures compared to EFA's Europe and Asia-Pacific focus. Investors should consider how the absence or presence of a specific major economy like Canada aligns with their desired international market representation.

Are both funds classified as Foreign Large Blend ETFs?

Yes, both EFA and VEA are classified under the Foreign Large Blend category. This indicates that both funds primarily invest in large-cap companies outside the investor's home country (typically the US, given the category naming convention). While they share this classification, their underlying indices differ, with EFA tracking MSCI EAFE and VEA tracking FTSE Developed Markets. The shared category confirms a similar investment style focus on developed market large caps, despite geographic and cost differences.

Which fund is associated with cost-conscious investing goals?

VEA is typically associated with cost-conscious investing goals due to its expense ratio of 0.03%, which is remarkably low compared to EFA's 0.32%. For investors prioritising minimal annual fees to maximise net returns over long periods, VEA's structure aligns with this objective. This does not imply superiority, but it reflects a focus on expense efficiency. Investors with lower cost sensitivity who prioritise the specific MSCI EAFE benchmark or higher yield may consider different factors.

Which fund might appeal to yield-focused investors?

EFA may appeal to yield-focused investors due to its higher dividend yield of 3.16% compared to VEA's 2.35%. This income difference can be significant for those relying on distributions for regular cash flow. However, this comes with a higher expense ratio of 0.32%. Investors must balance the benefit of higher current income against the drag of higher annual fees. The choice depends on whether immediate income or long-term cost efficiency is the primary investment goal.

Why is the inception date relevant when comparing these funds?

The inception dates of 14 August 2001 for EFA and 20 July 2007 for VEA indicate the operational history of each fund. EFA's older structure may imply longer performance history, while VEA's more recent inception might reflect modern indexing techniques and cost structures. These dates do not guarantee future performance but help contextualise the fund's background. Investors might consider the longer track record of EFA or the potentially more contemporary design of VEA when evaluating fund heritage.

EFA vs VEA

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

This page compares EFA and VEA, detailing their fees, holdings, dividends and how each fund tracks its market. It highlights expense ratios and asset values based on current data to inform your decision. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

EFA

Metric

VEA

0.32%

Expense Ratio

0.03%

3.16%

Dividend Yield

2.35%

$77.65B

Net Assets

$233.81B

688

Holdings

3,922

Aug 14, 2001

Inception Date

Jul 20, 2007

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Index Tracked

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Foreign Large Blend

Fund Category

Foreign Large Blend

VEA costs about $29.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

EFA

Pros

EFA provides broad exposure to developed market equities excluding the US and Canada through the MSCI EAFE index.
The fund maintains high liquidity and tight bid-ask spreads due to its substantial net assets of $77.7 billion.
A dividend yield of 3.16% may offer attractive income generation relative to lower-yielding developed market alternatives.

Considerations

The expense ratio of 0.32% is significantly higher than comparable low-cost developed market ETFs such as VEA.
Top holdings and detailed sector weights are not available, limiting transparency for immediate investor assessment.
Inception date of 2001 suggests older fund structure that may lack modern cost-efficiency innovations.

VEA

Pros

VEA charges a remarkably low expense ratio of 0.03%, enhancing net returns through minimal annual fees.
With $233.8 billion in net assets, the fund offers excellent liquidity and economies of scale.
The FTSE Developed Markets index provides comprehensive exposure to international developed equities including Canada.

Considerations

The dividend yield of 2.35% is lower than EFA, potentially reducing income for yield-focused investors.
Only SHOP at 0.54% is listed among top holdings, while broader sector weights remain unavailable.
The fund inception date of 2007 is more recent, though this offers limited comparative disadvantage.

About EFA and VEA

EFA (EFA)

The iShares MSCI EAFE ETF (EFA) is a widely recognised investment vehicle designed to provide broad exposure to large and mid-cap companies in developed markets outside the United States and Canada. The term 'EAFE' stands for Europe, Australasia, and the Far East. This fund allows investors to diversify their portfolios geographically, accessing established economies across regions such as the UK, Japan, Australia, and Switzerland. With a history dating back to 2001, it offers a relatively stable track record for those seeking international diversification. While it holds hundreds of stocks, investors should remember that global equities carry risks, including currency fluctuations and varying regulatory environments. Returns are not guaranteed, and values can fall as well as rise.

VEA (VEA)

The Vanguard FTSE Developed Markets ETF (VEA) is an exchange-traded fund designed to provide investors with broad exposure to large and mid-capitalisation companies in developed markets outside the United States. It seeks to track a benchmark index comprising thousands of holdings from regions including Europe, Australasia, and Canada. With a low expense ratio of 0.03%, this fund offers a cost-effective way to diversify a portfolio beyond domestic UK and US equities. The fund’s current dividend yield stands at 2.35%, reflecting potential income generation from its global holdings. As with any investment, the value of units can go down as well as up, and past performance is not a reliable indicator of future results. Investors should consider their risk tolerance and financial goals carefully, noting that currency fluctuations and regional economic shifts may impact returns.

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EFA vs VEA

Fund Snapshot