iShares Core MSCI EAFE ETF outperforms S&P 500 in 2026 despite geopolitical risks

The iShares Core MSCI EAFE ETF (IEFA) has outperformed the S&P 500 so far in 2026, driven by its attractive valuation despite geopolitical challenges like the war in Iran. IEFA focuses on companies in energy-importing developed markets in Europe and Asia, which face economic headwinds due to energy price volatility. Trading at a lower price-to-earnings ratio than the S&P 500, IEFA offers a 3.35% dividend expected to grow about 5% long term. Key risks include sector cyclicality and currency fluctuations, but the fund remains a compelling option for investors seeking value outside the U.S.