Which Is the Better International ETF: Vanguard's Low-Cost VEA or State Street's Climate-Focused NZAC?

The State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) provides global climate-focused exposure, while the Vanguard FTSE Developed Markets ETF (NYSEMKT:VEA) offers low-cost, broad diversification across established international economies.

Investors choosing between these funds may weigh specialized environmental objectives against broad-market efficiency. NZAC targets companies aligned with the Paris Agreement, whereas VEA serves as a cornerstone for developed international equity exposure. Both aim for long-term growth but through significantly different geographic and thematic lenses.

Snapshot (cost & size)

Metric	VEA	NZAC
Issuer	Vanguard	SPDR
Share price	$71.09 (as of 2026-07-30)	$45.54 (as of 2026-07-30)
Expense ratio	0.03%	0.12%
1-yr return (as of July 30, 2026)	29.0%	16.5%
Dividend yield	2.6%	2.1%
Beta	0.83	0.95
AUM	$316.3 billion	$0.2 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Vanguard fund is the more affordable option with its 0.03% expense ratio. While the SPDR fund remains competitively priced for a thematic product at 0.12%, it also offers a lower trailing payout to investors.

Performance & risk comparison

Metric	VEA	NZAC
Max drawdown (5 yr)	(29.7%)	(28.3%)
Growth of $1,000 over 5 years (total return)	$1,604	$1,556

What's inside

The State Street SPDR MSCI ACWI Climate Paris Aligned ETF concentrates on the technology sector, which accounts for 34% of the portfolio, followed by financial services at 15% and cash and other holdings at 10%. The fund holds 630 stocks in total, and its largest positions include Apple (NASDAQ:AAPL) at 5.60%, Nvidia (NASDAQ:NVDA) at 5.59%, and Microsoft (NASDAQ:MSFT) at 3.16%. It was launched in 2014. It uses an ESG screen to maintain climate alignment. State Street SPDR MSCI ACWI Climate Paris Aligned ETF has paid $0.94 per share over the trailing 12 months, which on its recent ~$45.5 share price works out to a 2.1% yield.

The Vanguard FTSE Developed Markets ETF is broadly diversified across 3,873 stocks, with 23% in financial services, 18% in technology, and 18% in industrials. Its largest holdings include Samsung Electronics (KOSE:A005930) at 3.14%, SK Hynix (KOSE:A000660) at 2.99%, and ASML Holding (ENXTAM:ASML) at 2.34%. Vanguard FTSE Developed Markets ETF has paid $1.81 per share over the trailing 12 months, which on its recent ~$71.1 share price works out to a 2.6% yield.

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

What this means for investors

International stocks have delivered one of their strongest runs in years, rewarding investors who looked beyond U.S. borders. VEA has been one of the most efficient vehicles for capturing that rally, holding nearly 4,000 companies across developed markets in Europe, Japan, and Australia with no U.S. exposure whatsoever. For investors whose portfolios lean heavily domestic, VEA adds a valuable international edge that their existing holdings truly lack.

With NZAC, it’s not that simple. Its Paris Agreement climate screen sounds like a bold global statement, but look at the top holdings: Nvidia, Apple, and Microsoft, the same U.S. megacap technology names that dominate most American portfolios already. NZAC is technically a global fund, but its climate methodology tilts it heavily toward technology companies already accessible through almost any broad U.S. index.

The fee difference between them is not trivial, with NZAC costing significantly more. That premium might be worth paying for investors who specifically want their money supporting companies committed to reducing carbon emissions and see the Paris Agreement framework as a smart investment filter rather than a marketing label. For everyone else who simply wants international diversification at the lowest possible cost, VEA does that job better.

Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends ASML, Apple, Microsoft, Nvidia, and Vanguard FTSE Developed Markets ETF. The Motley Fool has a disclosure policy.