iShares Core MSCI EAFE ETF (IEFA) Covered Calls

The iShares Core MSCI EAFE ETF (IEFA) offers low-cost, broad exposure to developed market stocks in Europe, Australia, and Asia, excluding the U.S. and Canada. Managed by BlackRock, it tracks the MSCI EAFE IMI Index, which includes large-, mid-, and small-cap companies. It serves as a foundational tool for international diversification, providing access to over 2,500 non-North American equities to drive long-term growth.

You can sell covered calls on iShares Core MSCI EAFE ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for IEFA (prices last updated Fri 4:16 PM ET):

iShares Core MSCI EAFE ETF (IEFA) Stock Quote
Last Change Bid Ask Volume P/E Market Cap
97.28 +0.08 96.92 102.69 15.7M - 118
Covered Calls For iShares Core MSCI EAFE ETF (IEFA)
Expiration Strike Call Bid Net Debit Return
If Flat		 Annualized
Return If Flat
Feb 20 97 0.65 102.04 -4.9% -223.6%
Mar 20 97 1.65 101.04 -4.0% -40.6%
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iShares Core MSCI EAFE ETF (IEFA) is a cornerstone exchange-traded fund designed to provide investors with "core" exposure to developed international equity markets. Launched in 2012 as a more cost-efficient and broader alternative to legacy funds, IEFA tracks the MSCI EAFE IMI Index. It is specifically structured for buy-and-hold investors seeking to capture the performance of the entire developed world outside of the United States and Canada, including small-cap companies that are often omitted from larger-cap international indices.

Portfolio Composition and Geographic Exposure

  1. Geographic Breadth: As of early 2026, the fund’s geographic allocation is heavily weighted toward Japan (approx. 24%), followed by the United Kingdom (14%), Switzerland (9%), France (8%), and Germany (8%). This distribution provides a diversified hedge against U.S. dollar volatility and domestic economic cycles.
  2. Sector Diversification: Unlike many tech-heavy U.S. indices, IEFA is led by Financials (23%), Industrials (20%), and Healthcare (11%). This makes the fund particularly sensitive to global interest rate environments and industrial trade cycles, while providing defensive stability through its healthcare holdings.
  3. Top Holdings: The portfolio is anchored by European and Asian "blue chips," including semiconductor giant ASML Holding, pharmaceutical leaders Roche and AstraZeneca, and financial powerhouse HSBC Holdings. Its 10 largest holdings represent only about 11% of total assets, reflecting high diversification.

Competitive Landscape

In the highly competitive international ETF space, IEFA is positioned as a "best-in-class" low-fee option with an expense ratio of 0.07%. Its primary direct rival is the Vanguard FTSE Developed Markets ETF, which tracks a similar but slightly different index that includes Canada and South Korea. It also competes with the Schwab International Equity ETF. For investors seeking total international exposure including emerging markets, it is often compared against the Vanguard Total International Stock ETF or its sister fund, the iShares Core MSCI Emerging Markets ETF. Traders looking for higher liquidity and a more robust options market often prefer the higher-priced iShares MSCI EAFE ETF.

Strategic Outlook for 2026

Entering 2026, IEFA remains a primary vehicle for investors betting on a "valuation catch-up" in international markets. With a total dividend yield near 3.5%, it offers a significant income advantage over domestic large-cap blends. The fund’s 2026 performance is being driven by the resurgence of Japanese equities following corporate governance reforms and the stabilization of European energy costs. Strategically, BlackRock continues to market IEFA as a tax-efficient core holding, utilizing its massive $174 billion asset base to minimize capital gains distributions. For 2026, analysts highlight IEFA’s unique exposure to the "Green Industrial" boom in Europe and the "AI-Adjacent" hardware leaders in Japan and the Netherlands as key growth catalysts.