International developed-market equities have outperformed US large caps through the first four months of 2026. The S&P 500 is up about 4.5% year to date, while three of the most widely held developed ex-US ETFs have posted mid-to-high single-digit gains over the same stretch. The performance gap reflects a rotation into cheaper European and Japanese equities, a weaker dollar, and a widening valuation spread between US mega-caps and their overseas peers.
The three funds below all target the same broad category (large- and mid-cap stocks in developed markets outside the United States) but use different indexes, different geographic definitions, and different fee structures. The distinctions matter more than the category label suggests.
Vanguard Developed Markets ETF: The Broadest Net
Vanguard Developed Markets ETF (NYSEARCA:VEA | VEA Price Prediction) tracks the FTSE Developed All Cap ex US Index, which covers large, mid, and small-cap equities across developed markets outside the United States. The fund holds $282 billion in total net assets, making it the largest of the three by a wide margin, and carries an expense ratio of 0.03%.
Two structural features set VEA apart from EAFE-style funds. It includes Canada, which materially changes the resource and financial exposure, and small caps, which the MSCI EAFE methodology excludes entirely. Top holdings span the usual multinational roster, including Samsung Electronics, ASML, and Novartis, giving the fund a heavier tilt toward Asian-developed markets than a purely European-weighted index would.
VEA has returned almost 10% year to date and 39% over the trailing one-year period, with shares closing at roughly $68. The trailing one-year figure outpaces the S&P 500’s 35% over the same period.
The tradeoff with the widest net is that investors take on exposure they may not want. Canadian energy and financials dilute the European and Japanese story that drives most of the developed ex-US narrative, and small-cap inclusion adds volatility that disappears in EAFE-only products.
iShares MSCI EAFE ETF: The Pure EAFE Benchmark
iShares MSCI EAFE ETF (NYSEARCA:EFA) tracks the MSCI EAFE Index (Net), which measures large- and mid-cap equities in developed markets in Europe, Australasia, and the Far East. The index excludes both the United States and Canada, producing the cleanest expression of non-North American developed-market exposure among the three funds. EFA manages $76 billion in assets and carries an expense ratio of 0.32%, the highest of the three by a wide margin.
The geographic weights explain the fund’s personality. Japan accounts for roughly 22%, followed by the United Kingdom at 15%, Germany at 9%, and Switzerland, also at 9%. Australia rounds out the top six at 6%. Sector concentration skews toward financials at about 25% and industrials at about 19%, with healthcare at just 10%. That is roughly a third of the tech weight in the S&P 500, which explains why EAFE tends to decouple from US performance when mega-cap tech moves independently.
Top holdings include ASML Holding, AstraZeneca, and Novartis. Year to date, EFA has returned about 6%, trailing VEA and SCHF but still ahead of the S&P 500. Over the trailing year, it has returned about 30%, with shares at about $102.
EFA is the oldest and most liquid fund in the category, which matters for institutional traders and options users. The fee gap is the persistent drawback. An expense ratio of 0.32% sits well above the 0.03% charged by VEA and SCHF, a spread that compounds over a multi-decade holding period.
Schwab International Equity ETF: The Low-Cost FTSE Alternative
Schwab International Equity ETF (NYSEARCA:SCHF) tracks the FTSE Developed ex US Index, which covers large- and mid-cap developed-market stocks outside the United States. Top holdings include Sony, Samsung, and ASML Holding, with diversified sector weightings across financial services, healthcare, and information technology.
SCHF sits structurally between VEA and EFA. Like VEA, it uses FTSE methodology and includes Canadian equities. Unlike VEA, it excludes small caps, keeping the portfolio to large and mid-cap names. The result is a fund that looks more like EAFE in market-cap profile but more like VEA in geographic reach. Among large, mainstream international equity ETFs, it is known for one of the lowest expense ratios in the category.
Performance has tracked VEA closely as SCHF has returned almost 10% year to date and 39% over the trailing year, with shares closing at roughly $26. The similarity to VEA’s numbers reflects the near-identical index methodology at the large and mid-cap levels, where most assets reside in any cap-weighted fund.
The tradeoff is that SCHF offers less differentiation against VEA than its ticker suggests. For an investor already holding VEA, adding SCHF produces duplicate exposure. The case for SCHF over VEA rests primarily on account ecosystem (Schwab brokerage users avoiding transaction friction) rather than portfolio construction.
Choosing Among the Three
The selection reduces to three questions. Investors who want the broadest possible developed ex-US exposure, including small caps and Canada, have a clear choice in VEA. Those who want a clean EAFE benchmark with no North American overlap and deep options market liquidity will gravitate toward EFA, accepting the higher fee as the cost of exact index exposure. SCHF serves investors already on the Schwab platform who want FTSE’s extensive and mid-cap coverage at a low expense ratio and do not need small-cap exposure.
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