IEFA vs. SPGM: Does This Developed Markets ETF Have the Edge Over A Global ETF?

Core Insights - Both SPGM and IEFA provide exposure to international stocks, but they have different focuses and advantages [2] Cost and Size Comparison - SPGM has an expense ratio of 0.09% and AUM of $1.45 billion, while IEFA has a lower expense ratio of 0.07% and significantly higher AUM of $171.77 billion [3] - The one-year return for SPGM is 21.47%, compared to IEFA's 28.70%, indicating IEFA's stronger recent performance [3][4] - IEFA offers a higher dividend yield of 3.32% versus SPGM's 1.82% [3][4] Performance and Risk Comparison - Over the past five years, SPGM has a max drawdown of 25.92%, while IEFA has a higher max drawdown of 30.41% [5] - An investment of $1,000 in SPGM would have grown to $1,539, while the same investment in IEFA would have grown to $1,338 [5] Portfolio Composition - IEFA focuses on developed markets outside the U.S. and Canada, with 2,589 holdings primarily in financial services (23%), industrials (19%), and consumer cyclicals (10%) [6] - SPGM includes a broader range of markets, with 2,969 holdings and a significant allocation to technology (26%), featuring major U.S. tech companies like Nvidia, Apple, and Microsoft [7] Investor Considerations - While both ETFs are viable for international stock exposure, IEFA's exclusion of North American companies may present unfamiliar risks for American investors [8] - SPGM's heavier weighting in U.S. stocks may result in less sensitivity to foreign market movements, making it a more stable long-term option [10]