Why is EFA better than IVV?

EFA may be considered better than IVV for some investors due to its specific focus, offering diversification.

IVV's performance relative to EFA will vary over time, depending on market conditions.

Should I invest in EFA or IVV?

The choice between EFA and IVV should align with your investment goals, risk tolerance, and desired exposure.

Are EFA and IVV good investments?

Both EFA and IVV can be suitable investments depending on individual investment strategies, goals, and risk profiles.

What is the correlation between EFA and IVV?

The correlation between EFA and IVV can vary over time, reflecting differences in performance.

4 min read

By Beqa Bumbeishvili, ETF Insider

EFA & IVV: Tracking and Exposure

Exchange-Traded Funds (ETFs) have revolutionized the investment world, offering diversified exposure across various sectors and asset classes. In this article, we will delve into a comprehensive comparison between two popular ETFs: EFA (iShares MSCI EAFE ETF) and IVV (iShares Core S&P 500 ETF). We'll explore various aspects including ETF tickers, full names, issuers, sectors, top holdings, capitalization, strategy, tracking, and exposure.

EFA & IVV: Overview

EFA and IVV are two ETFs that cater to different investment strategies within the global equities market. EFA seeks to replicate the performance of developed markets outside of the U.S. and Canada, while IVV aims to mirror the returns of the S&P 500 Index, representing the largest U.S. publicly traded companies. This fundamental distinction in focus influences their investment profiles, which we will examine in the subsequent sections.

EFA & IVV: Sectors and Top Holdings

The EFA ETF encompasses a broad spectrum of developed international markets, including sectors like finance, healthcare, technology, and more. Its top holdings might include multinational corporations such as Nestle, Samsung, and Toyota. In contrast, IVV's portfolio primarily comprises U.S. companies spanning sectors like technology, healthcare, finance, and consumer goods. Familiar names like Apple, Microsoft, and Amazon are often found among its top holdings. Understanding the sectors and top holdings of these ETFs assists investors in aligning their investment objectives with suitable options.

EFA overlap EFA VS IVV

EFA & IVV: Capitalization and Strategy

EFA boasts a substantial asset under management (AUM), reflecting its popularity among investors seeking international exposure. IVV's strategy revolves around replicating the performance of the S&P 500 Index, often considered a benchmark for U.S. equity markets. The difference in capitalization and strategy between these ETFs can impact potential returns and risk profiles, necessitating careful consideration by investors.

EFA & IVV: Tracking and Exposure

EFA's objective is to provide investors with exposure to the performance of developed markets outside North America. The tracking mechanism involves replicating the underlying index's performance through a diverse selection of international equities. IVV, on the other hand, aims to mirror the S&P 500 Index's returns by holding a proportionate basket of the index's constituent companies. The contrasting tracking and exposure methods help investors choose between global diversification and domestic focus based on their preferences and risk tolerance.

Conclusion

EFA and IVV are distinct ETFs that cater to unique investment strategies within the realm of global equities. For investors seeking in-depth insights into holdings, correlations, overlaps, and various nuances, ETF Insider serves as the ultimate tool. With its user-friendly app, it offers a wealth of information on these and other financial instruments.

Disclaimer: This article does not provide any investment advisory services.

Sources:
iShares. "iShares MSCI EAFE ETF (EFA)." URL: https://www.ishares.com/us/products/239623/ishares-msci-eafe-etf
iShares. "iShares Core S&P 500 ETF (IVV)." URL: https://www.ishares.com/us/products/239726/ishares-core-sp-500-etf

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FAQ

Why is EFA better than IVV?
EFA may be considered better than IVV for some investors due to its specific focus, offering diversification.
Does IVV beat EFA?
IVV's performance relative to EFA will vary over time, depending on market conditions.
Should I invest in EFA or IVV?
The choice between EFA and IVV should align with your investment goals, risk tolerance, and desired exposure.
Are EFA and IVV good investments?
Both EFA and IVV can be suitable investments depending on individual investment strategies, goals, and risk profiles.
What is the correlation between EFA and IVV?
The correlation between EFA and IVV can vary over time, reflecting differences in performance.