Forget US Dominance for Now: EFA Outperforms SPY With 2.34% Gain While S&P Slips

"iShares MSCI EAFE ETF (NYSEARCA:EFA) tracks the MSCI EAFE Index, covering large- and mid-cap equities across developed markets in Europe, Australasia, and the Far East, explicitly excluding the US and Canada. The fund has been running since August 2001, carries $77.8 billion in assets, and charges 32 basis points annually. For a fund of this size and history, that cost is competitive."

"One structural detail retirees need to understand: EFA is unhedged. Currency movements between the euro, yen, pound, and the US dollar flow directly into returns, adding volatility but also giving EFA the ability to benefit when the dollar weakens."

"EFA is up 2.34% year-to-date while SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has slipped 1.4%, a reversal that reflects both dollar weakness and a rotation toward cheaper international valuations. Over the trailing twelve months, EFA's 21.82% return has outpaced SPY's 17.4%."

EFA tracks the MSCI EAFE Index, covering large- and mid-cap equities across developed markets in Europe, Australasia, and the Far East, excluding the US and Canada. With $77.8 billion in assets and a 32 basis point annual fee, the fund holds blue-chip multinationals like ASML, Roche, and Toyota with strong dividend histories. The fund's 4% annual turnover reflects a buy-and-hold strategy that minimizes trading costs and tax drag. EFA is unhedged, meaning currency fluctuations directly impact returns, adding volatility but enabling gains when the dollar weakens. Year-to-date through early March 2026, EFA gained 2.34% while the S&P 500 declined 1.4%, reflecting dollar weakness and rotation toward cheaper international valuations.

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