The iShares Core MSCI EAFE ETF (IEFA) aims to track the investment results of an index composed of large-, mid- and small-capitalisation developed market equities, excluding the US and Canada.
It was launched in October 2012 and is designed to track its benchmark index, the MSCI EAFE Investable Market Index, offering a broad representation of developed economies in Europe, Australia, Asia, and the Far East. It currently has 2,683 holdings, with some top international names such as Novo Nordisk, Roche, and Shell.
iShares Core MSCI EAFE (IEFA) ETF Price and Chart
The ETF is particularly appealing for those seeking to diversify their portfolios geographically, gaining access to well-established markets with exposure to sectors and companies not typically found in the US. IEFA’s cost-efficiency and extensive coverage make it a popular choice among investors.
At the beginning of 2025, the iShares Core MSCI EAFE ETF's net assets of fund were $121.55 billion.
iShares Core MSCI EAFE (IEFA) ETF Performance
The performance of IEFA reflects trends in international developed markets, influenced by local economic conditions, exchange rates, and global trade dynamics.
| Year | Performance |
|---|---|
| 2025 (YTD) | |
| 2024 | +6.57% |
| 2023 | +17.99% |
| 2022 | -15.21% |
| 2021 | +11.65% |
| 2020 | +8.17% |
IEFA Top Holdings (as end 2024)
| Company | Weight |
|---|---|
| Novo Nordisk | 1.77% |
| ASML | 1.39% |
| SAP | 1.27% |
| Nestle | 1.18% |
| AstraZeneca | 1.08% |
| Novartis | 1.08% |
| Roche | 1.05% |
| Shell | 1.04% |
| Toyota | 0.91% |
| LVMH | 0.90% |
International Market Forecast
Of course, the term international market can cover a broad spectrum. However, there are still many potential factors to watch out for when it comes to investing in an internationally focused ETF.
Analysts at Vanguard recently released an article providing their economic and market outlook for 2025. The firm noted that “the path to disinflation has been uneven across countries and regions, with most developed markets enduring monetary-policy-induced slowdowns to get there.” Furthermore, Vanguard says that although central banks are in the process of easing monetary policy, they believe rates will settle at higher levels than in the 2010s, setting the foundation for solid cash and fixed income returns over the next decade.
However, their equity view is more cautious. Nevertheless, they believe international valuations are more attractive and that it could continue as economies outside of the US are likely to be most exposed to rising global economic and policy risks.
One potential headwind noted by Vanguard is China, which it states is the “sole reason valuations are below fair value.” They note that “the risks of rising trade tensions and insufficient fiscal stimulus in China pose additional headwinds,” which could impact companies in Asia.
Elsewhere, UBS analysts recently upgraded UK equity markets but downgraded European equities. The bank said the UK is less exposed to Trump's expected trade policies and tariffs, while Europe was downgraded “because current relative earnings and economic momentum is very poor.”
Morningstar recently ranked Australian equities as one of the “least favourable” investment opportunities.
Finally, in Asia, Invesco recently stated that for 2025, they expect domestic demand in the region to strengthen, while “increased intra-regional trade driven by China's economic recovery will enhance exports and consumption.”
Our View: IEFA offers a diversified and cost-efficient way to access developed markets outside North America. While short-term risks remain, long-term investors may benefit from economic recovery in these regions and exposure to industries not as heavily represented in the US.
Who Should Buy the iShares Core MSCI EAFE (IEFA) ETF?
Clearly, the IEFA ETF is well-suited for investors seeking geographic diversification, given that it provides exposure to markets outside North America, offering a balanced portfolio of companies across Europe, Australasia, and the Far East.
Furthermore, long-term investors looking for steady growth will note that developed markets tend to offer stability compared to emerging markets, making IEFA a viable option for patient investors.
With generally lower valuations than in the US, cost-conscious investors may want to look at other equity markets. In addition, the ETF has a low expense ratio, making it a potentially more affordable choice for broad international exposure.
However, IEFA may not be suitable for investors averse to currency risks as returns can be impacted by fluctuations in local currencies against the US dollar. Meanwhile, those prioritising high-growth opportunities may find more attractive options elsewhere as the IEFA focuses on developed markets outside of the US, which typically offers slower growth.
