SPGM vs IEFA: Which Global Stock ETF Is the Better Buy?
Written by Brendan Coffey for The Motley Fool -> State Street SPDR Portfolio MSCI Global Stock Market ETF provides broad exposure to U.S. and emerging markets while iShares Core MSCI EAFE ETF focuses strictly on developed international stocks The iShares fund offers a significa
State Street SPDR Portfolio MSCI Global Stock Market ETF provides broad exposure to U.S. and emerging markets while iShares Core MSCI EAFE ETF focuses strictly on developed international stocks
The iShares fund offers a significantly higher dividend yield and lower expense ratio than the State Street alternative
State Street SPDR Portfolio MSCI Global Stock Market ETF has delivered higher total returns and lower maximum drawdown over the last five years
There is a world of stocks out there. Diversified investors would be wise to hold some in their portfolios. But the question is which is the better fund to get global stock exposure?
The State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) offers all-in-one global equity exposure, while the iShares Core MSCI EAFE ETF (NYSEMKT:IEFA) targets developed markets excluding North America.
These two funds provide different building blocks for an international portfolio. The iShares fund tracks developed markets like Japan and the United Kingdom, serving as a complement to U.S. holdings, whereas the State Street fund serves as a total-world solution that includes American and emerging-market companies.
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares fund is slightly more affordable with a 0.07% expense ratio compared to 0.09% for the State Street fund. This price advantage is paired with a higher payout: the iShares fund provides a 3.30% distribution yield based on its June 12 midday stock price of $98.12.
