VEA vs. SPDW: Which International ETF Is the Best Choice for Investors?

The Vanguard FTSE Developed Markets ETF (VEA 0.34%) and the SPDR Portfolio Developed World ex-US ETF (SPDW 0.36%) both aim to track the performance of developed markets outside the United States, providing diversified exposure across Europe, Asia, and Canada.

This comparison looks at how the two funds stack up on cost, yield, risk, holdings, and portfolio quirks to help investors decide which may appeal more for international equity allocation.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The one-year return represents total return over the trailing 12 months.

Both funds are among the most affordable international ETFs, charging just 0.03% in annual fees. However, SPDW offers a marginally higher dividend yield, which may appeal to income-focused investors.

Performance & risk comparison

What’s inside

SPDW holds 2,386 stocks, tracking developed markets outside of the U.S. with top sector allocations to financial services (making up 24% of assets), industrials (19%), and technology (12%). Its largest positions are ASML Holding, Samsung Electronics, and Roche Holding AG. The fund has an 18-year history, providing broad international diversification without notable quirks or overlays.

VEA is even broader, with 3,853 holdings and nearly identical sector tilts and top holdings as SPDW. Both funds avoid the U.S. market and are designed as core international equity building blocks.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Investing in an international ETF can be a smart way to diversify your portfolio, and both VEA and SPDW offer broad, low-cost access to developed international markets.

VEA is the broader of the two funds, holding nearly 1,500 more stocks than SPDW. However, the ETFs offer very similar allocations toward their top sectors and holdings. The top three stocks are the same across both funds, making up 3.86% of VEA’s portfolio compared to 3.74% for SPDW. Both ETFs allocate roughly one-quarter of their assets to financial services, followed by industrials and technology.

This similar portfolio makeup is reflected in their nearly identical performances. The funds have experienced roughly the same 12-month and five-year total returns, with virtually identical betas and max drawdowns — signalling similar levels of price volatility.

One difference to consider, though, is fund size. VEA offers a much larger assets under management (AUM), which can provide greater liquidity and make it easier for investors to buy and sell without impacting the ETF’s price.

Both of these ETFs can be fantastic investments, and given how similar they are, investors can’t go wrong with either choice. Deciding between them will likely come down to differences in AUM, dividend yield, and number of holdings.

Glossary

ETF: Exchange-traded fund that holds a basket of assets and trades like a stock on exchanges.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends paid by a fund divided by its current share price, shown as a percentage.
Beta: Measure of a fund’s volatility compared with the overall market; below one is less volatile.
AUM: Assets under management; the total market value of all assets a fund manages.
Developed markets: Economically advanced countries with mature financial systems, such as Japan, the U.K., and Canada.
Ex-US: Investment strategy that intentionally excludes U.S.-based companies from the portfolio.
Max drawdown: Largest peak-to-trough decline in value over a specific period, showing worst historical loss.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Sector allocation: How a fund’s assets are divided among different industries, such as financials, technology, or industrials.
Holdings: Individual securities, like stocks or bonds, that a fund owns in its portfolio.
International equity: Stocks of companies based outside the investor’s home country, often used for diversification.