Three low-cost funds for developed markets outside the US, but they do not hold the same countries. VEA and SCHF include Canada and South Korea; IEFA includes neither. Here is what that did to returns, and how to avoid gaps or double-counting when you pair them with an emerging-markets fund.
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If you want every developed market outside the US, including Canada and Korea, VEA is the broadest and cheapest of the three, and SCHF is a large-company version at the same fee. IEFA fits when you deliberately want Europe, Japan and Australasia only, or when you pair it with iShares’ MSCI emerging-markets fund, which holds Korea.
Scope: developed ex-US stock ETFs for a US retirement saver. Excluded: one-fund total-international options (see VXUS vs IXUS), currency-hedged and dividend or value funds, and the question of how much to hold abroad (do I need international ETFs). Education, not advice for your situation.
| Your goal | Fits | Why |
|---|---|---|
| All developed markets incl. small caps, lowest fee | VEA | 0.03%, Canada and Korea included |
| Developed large and mid caps only | SCHF | 0.03%, about 1,440 holdings |
| Europe, Japan, Australasia without Canada | IEFA | MSCI EAFE IMI excludes Canada |
| You will add an iShares MSCI emerging fund | IEFA (or IDEV) | Korea is counted once, in the emerging fund |
| You will add a Vanguard emerging fund | VEA | Korea is counted once, in VEA |
Index, fees, holdings and trailing returns (NAV, to Sep 30, 2026) from the issuers; SCHF assets, distribution yields, calendar-year returns and the 2022 drop from Exent market data (daily total return).
| VEA | IEFA | SCHF | |
|---|---|---|---|
| Index | FTSE Developed All Cap ex US | MSCI EAFE IMI | FTSE Developed ex US |
| Company sizes | Large, mid, small | Large, mid, small | Large and mid |
| Canada | Yes, 10.8% | No | Yes, 10.9% |
| South Korea | Yes, 9.2% | No (MSCI: emerging) | Yes, 7.8% |
| Japan / UK | 21.9% / 11.1% | 26.1% / 14.4% | 21.7% / 10.9% |
| Expense ratio | 0.03% | 0.07% | 0.03% |
| Holdings | 3,903 | 2,625 | 1,440 |
| Assets | $231.6B ETF / $313.5B fund | $188.2B | $66.9B |
| Distributions | Quarterly | Semi-annual | Semi-annual |
| Distribution yield, trailing 12 months (to Sep 30) | 2.41% | 3.39% | 3.07% |
| 1-year return | 20.77% | 14.76% | 22.25% |
| 5-year return, per year | 10.32% | 9.04% | 10.59% |
| 10-year return, per year | 9.76% | 9.09% | 9.93% |
| 2025 calendar-year return | 35.2% | 32.1% | 34.5% |
| 2022 selloff, Jan 3–Oct 12 peak to trough | −28.8% | −29.2% | −28.5% |
Country weights: VEA from Vanguard (Sep 30, 2026), IEFA from iShares (Oct 22, 2026), SCHF from the same market data (Oct 25, 2026). VEA’s fact sheet shows a 10-year NAV return of 9.76% a year against 9.81% for its index, a gap close to its fee.
Because the index providers draw the map differently. Vanguard’s VEA index covers “Canada and the major markets of Europe and the Pacific region,” about 3,700 stocks of all sizes (Vanguard). FTSE treats South Korea as developed, which is why Samsung (3.2%) and SK hynix (2.3%) are VEA’s two largest holdings. Schwab says SCHF provides “exposure to South Korea and Canada” through large and mid caps (Schwab).
IEFA tracks MSCI EAFE IMI, which iShares describes as developed markets “outside the U.S. and Canada” (iShares). MSCI still classifies Korea as an emerging market: its Jun 23, 2026 review kept Korea under monitoring rather than adding it to the watch list for an upgrade (MSCI). The same review confirmed Greece moves from emerging to developed at MSCI’s May 2027 index review, so MSCI developed-market funds will start holding Greek stocks then. Labels change slowly, but they do change.
Mostly the countries IEFA leaves out. Over the 12 months to Sep 30, 2026 the two FTSE-based funds, with 8% to 9% in Korea and about 11% in Canada, returned 20.8% and 22.3% against 14.8% for IEFA (issuer NAV). Over longer periods the gap shrinks, and in some years IEFA led (calendar years: Exent market data; 2026 to date: issuer NAV):
| Calendar year | VEA | IEFA | SCHF |
|---|---|---|---|
| 2018 | −14.8% | −14.1% | −14.3% |
| 2020 | 9.7% | 8.2% | 9.4% |
| 2022 | −15.3% | −15.2% | −14.8% |
| 2023 | 17.9% | 18.0% | 18.3% |
| 2024 | 3.2% | 3.3% | 3.3% |
| 2025 | 35.2% | 32.1% | 34.5% |
| 2026 to Sep 30 | 14.2% | 10.2% | 15.1% |
A single country’s run is not a reason to switch funds. It is a reason to know which countries you own, because the next decade’s leaders are unknown; US vs international returns shows how leadership has rotated by decade.
Use the same index family for both, or check Korea and Canada by hand. Exent calculation, hypothetical 70% developed / 30% emerging split, using each fund’s Korea weight from the issuers (VEA 9.2%, IEFA 0%; IEMG 20.58%, VWO 0%; Sep 30, 2026):
| Pair (70% / 30%) | Korea weight | Calculation | Canada |
|---|---|---|---|
| VEA + VWO (FTSE + FTSE) | 6.4% | 0.7 × 9.2 + 0.3 × 0 = 6.44 | Yes |
| IEFA + IEMG (MSCI + MSCI) | 6.2% | 0.7 × 0 + 0.3 × 20.58 = 6.17 | No |
| VEA + IEMG (mixed) | 12.6% | 0.7 × 9.2 + 0.3 × 20.58 = 12.61 | Yes |
| IEFA + VWO (mixed) | 0% | 0.7 × 0 + 0.3 × 0 | No |
| VXUS alone, for reference | 6.7% | Vanguard, Sep 30, 2026 | Yes |
Mixing providers either doubles Korea or drops it, and IEFA pairs leave out Canada, about 8% of a total-international index. The simplest fix is a single total-international fund; the next is to keep both halves from one provider, or use IDEV (MSCI World ex USA IMI, which includes Canada) with IEMG.
| Fund | Pros | Cons |
|---|---|---|
| VEA | 0.03%; about 3,900 stocks of every size; includes Canada and Korea; part of a $314 billion fund; quarterly payouts. | Pairing it with an MSCI emerging fund double-counts Korea; two Korean chipmakers are its largest holdings, which adds semiconductor exposure. |
| IEFA | Includes small caps; clean match with iShares MSCI emerging funds; no overlap with Canada funds if you hold one separately. | 0.07%, more than twice VEA and SCHF; no Canada or Korea, so it is not all developed markets; lagged VEA by about 6 points over the last year. |
| SCHF | 0.03%; includes Canada and Korea; fewer, larger holdings are easy to follow. | No small companies; semi-annual payouts; smaller ($67 billion) than the other two. |
Expense ratios, holdings and indexes from the issuers (Sep 30–Oct 23, 2026); country weights from Exent market data, Oct 25, 2026:
| ETF | Index or coverage | Expense ratio | Holdings | Canada / Korea |
|---|---|---|---|---|
| SPDW (State Street) | S&P Developed Ex-U.S. BMI | 0.03% | 2,438 | Yes (10.8%) / yes (8.0%) |
| IDEV (iShares) | MSCI World ex USA IMI | 0.04% | 2,314 | Yes (12.5%) / no |
| EFA (iShares) | Same countries as IEFA, fewer and larger companies | 0.32% | 656 | No / no |
| VXUS (Vanguard) | FTSE Global All Cap ex US | 0.05% | 8,901 | Yes / yes, plus emerging markets |
When it is meant to be your whole international allocation. Counterexample: a saver who holds VEA as “international” owns no Taiwan, China or India, which together were about 21% of VXUS on Sep 30, 2026 (Taiwan 9.3%, China 6.9%, India 4.3%; Vanguard). Taiwan Semiconductor alone was VXUS’s largest holding at 4.3%. A developed fund needs an emerging fund beside it, or a total-international fund instead; the emerging side is compared in VWO vs IEMG, and how much to hold abroad in international ETFs for retirement.
The other case is a 401(k) that offers only an EAFE-style fund. Adding VEA in an IRA then double-counts Japan and Europe; adding a small Canada or emerging fund, or VXUS, fills the actual gap. Before switching anything in a taxable account, weigh the tax on gains against a 0.04-point fee difference; see the S&P 500 switching example for the arithmetic.
Which countries your developed fund holds is a one-time choice; how Europe, Japan and Korea move against US stocks changes every week, and that is where a written mix gets tested.
Yes. Canada was 10.8% of VEA on Sep 30, 2026, per Vanguard. SCHF also includes Canada; IEFA does not.
No. MSCI classifies South Korea as an emerging market, and its Jun 2026 review kept it there, so Korean stocks sit in MSCI emerging-markets funds such as IEMG, not in IEFA.
VEA is broader (Canada and Korea included) and cheaper at 0.03% vs 0.07%. IEFA fits if you pair it with an iShares MSCI emerging fund. Over 10 years to Sep 30, 2026, VEA returned 9.76% a year and IEFA 9.09% (issuer NAV).
Largely country mix: VEA held 9.2% in South Korea and 10.8% in Canada, which IEFA excludes. Through Sep 30, 2026, VEA returned 14.24% year to date vs 10.21% for IEFA (issuer NAV).
No. SCHF tracks the FTSE Developed ex US Index of large and mid caps and held about 1,440 stocks. VEA and IEFA both include small companies.
You can, but Korea is then counted twice: an illustrative 70/30 mix holds about 12.6% in Korea, against 6.7% in VXUS. VEA with VWO, or IEFA with IEMG, avoids that.
For a long-term saver, IEFA costs 0.07% vs 0.32% for EFA and adds small companies, holding about 2,625 stocks vs 656. Both exclude Canada and Korea.
Not if you want emerging markets too. VEA owns no Taiwan, China or India, about 21% of a total-international fund like VXUS in Sep 2026.
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Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.