ETF Comparison: Vanguard FTSE Europe ETF (VGK) Versus iShares Core MSCI Europe ETF (IEUR)

VGK vs. IEUR: Total Cost of Ownership

VGK comes out ahead on explicit fees, charging 0.06% compared to IEUR’s 0.09%. On a $10,000 investment, that’s $6 versus $9 annually — not a dealbreaker, but VGK is objectively cheaper.

When it comes to implicit costs, VGK also leads. Its 30-day median bid-ask spread sits at just 0.015%, while IEUR’s is noticeably wider at 0.046%. That difference matters, especially for larger trades or frequent rebalancing, as wider spreads increase trading costs.

Verdict: Add the expense ratio and trading costs together, and VGK comes out as the lower-cost option. It’s cheaper to own and more efficient to trade.

VGK vs. IEUR: Methodology and Holdings

It’s not worth diving too deep into each ETF’s specific benchmark rules — in practice, the differences are minimal and inconsequential for investors. 

VGK

tracks the FTSE Developed Europe All Cap Index, a market cap-weighted basket of 1,232 European equities spanning large-, mid-, and small-cap names. IEUR

IEUR

-0.08%

, meanwhile, tracks the MSCI Europe IMI Index, which holds 984 stocks and also includes all three size segments.

Yes, MSCI and FTSE sometimes differ on country and size classifications — for instance, FTSE considers South Korea developed while MSCI classifies it as emerging — but that’s irrelevant here.

Both funds yield around 3% (VGK at 3.19%, IEUR at 3.21%) and concentrate most of their weight in the same countries: the U.K. (post-Brexit, no longer EU), France, Switzerland, and Germany.

Sector exposures are also aligned, led by financials, industrials, healthcare, and consumer discretionary. Top holdings are familiar European multinationals like SAP, Novo Nordisk, Nestlé, AstraZeneca, Roche, Novartis, HSBC, Shell, LVMH, and Siemens.

Thanks to their broad diversification, neither ETF is top-heavy — less than 25% of total assets sit in the top 15 names, something that you don’t see for U.S. equity ETFs.

Verdict: It’s a wash — and pun fully intended. The two ETFs are nearly identical in sector, country, and stock exposure despite tracking different benchmarks, making them suitable tax-loss harvesting substitutes without triggering a wash sale.

VGK vs. IEUR: Risk and Return

Short-term performance has been nearly identical. Over the past three years, one year, and year-to-date, VGK and IEUR have tracked within 1% of each other. Both ETFs have also attracted strong inflows as investors have finally started to appreciate Europe’s relative value.

On the risk side, they’re just as close. Annualized volatility, max drawdown depth, and drawdown duration are virtually the same. It’s yet another sign that despite different benchmark providers, these ETFs behave almost identically — think Coca-Cola vs. Pepsi.

A longer-term backtest from June 12, 2014, to April 3, 2025, shows IEUR with a 4.60% CAGR and VGK just behind at 4.57%. Both posted a Sharpe ratio of 0.24 over that period, meaning they were identical on a risk-adjusted basis.

Verdict: Another tie. Flip a coin. You can expect these ETFs to deliver almost identical performance over time, barring a modest divergence of 100 basis points or less.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.