IXUS vs. IEFA: Which International ETF Is Better for Most Investors?
Written by Ben Gran for The Motley Fool -> The iShares Core MSCI Total International Stock ETF has outperformed the S&P 500 index in the past year (as of June 7). The iShares Core MSCI EAFE ETF has delivered a trailing 12-month dividend yield of 3.30%. Since it owns more stock
The iShares Core MSCI Total International Stock ETF has outperformed the S&P 500 index in the past year (as of June 7).
The iShares Core MSCI EAFE ETF has delivered a trailing 12-month dividend yield of 3.30%.
Since it owns more stocks from a wider range of markets, the iShares Core MSCI Total International Stock ETF could be a better choice for long-term investors.
Buying international exchange-traded funds (ETFs) is an easy way to tap into the growth potential of stock markets beyond America. There's no guarantee that other countries' stock markets will outperform the S&P 500 index. But owning shares in international companies can be a way to protect against a downturn in U.S. tech stocks or hedge against the risk of a weaker U.S. dollar.
Two iShares ETFs offer slightly different approaches to buying global stocks, and one is more diversified than the other. The iShares Core MSCI Total International Stock ETF (NASDAQ: IXUS) offers exposure to more than 4,000 global stocks from a wide range of markets, while the iShares Core MSCI EAFE ETF (NYSEMKT: IEFA) holds about 2,600 stocks with a focus on developed markets.
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In the past year, the more-diversified fund (IXUS) has slightly outperformed the S&P 500 , with a total return of 25.8%:
Understanding each international ETF's past performance and current holdings can help you decide which fund might be a better fit for your goals. Let's take a closer look.
