Key Points
IEMG delivered a much higher one-year return but saw a deeper maximum drawdown over five years.
VXUS covers both developed and emerging markets, while IEMG focuses solely on emerging economies.
VXUS is significantly larger with a lower expense ratio and a slightly higher dividend yield.
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The Vanguard Total International Stock ETF (NASDAQ:VXUS) and iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) differ most in geographic scope, sector tilts, and recent performance. VXUS offers broader international exposure, and IEMG concentrates on emerging markets and delivers stronger one-year returns.
Both VXUS and IEMG give investors access to stocks outside the United States, but their mandates and risk profiles diverge. VXUS spans both developed and emerging markets, aiming for maximum diversification, while IEMG focuses exclusively on emerging markets, leading to different sector weights and return patterns. This comparison breaks down their key differences to help investors decide which approach may best align with their goals.
Snapshot (cost & size)
| Metric | VXUS | IEMG |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.05% | 0.09% |
| 1-yr return (as of April 22, 2026) | 36.9% | 52.1% |
| Dividend yield | 2.77% | 2.37% |
| Beta | 0.94 | 0.93 |
| AUM | $582.3 billion | $148.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
VXUS is more affordable on an annual basis and offers a slightly higher dividend yield. In comparison, IEMG has a marginally higher fee and a lower yield, but may appeal to those seeking pure emerging markets exposure.
Performance & risk comparison
| Metric | VXUS | IEMG |
|---|---|---|
| Max drawdown (five years) | (29.4%) | (37.1%) |
| Growth of $1,000 over five years | $1,473 | $1,339 |
What's inside
VXUS invests across both developed and emerging international markets, resulting in a broader, more diversified portfolio of 8,782 holdings. Its top holdings includes cross several sectors, including financial services, industrials, and technology. The largest positions are Taiwan Semiconductor Manufacturing (2330.TW) and Samsung Electronics. This breadth may help dampen volatility relative to a pure emerging markets approach.
IEMG, by contrast, is built to capture the full breadth of emerging markets, holding 2,657 companies. It leans heavily into information technology (34%) and financials (19%), with sizable positions in Taiwan Semiconductor Manufacturing (2330.SR), Samsung Electronics Ltd (005930.KS), and Sk Hynix Inc (000660.KS). This sector mix and the concentration of top holdings reflect the dominance of Asian tech giants in the emerging universe.
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What does this mean for investors
These are both solid international funds, based on their competitive fees, above-average dividend yields, liquidity, and diversification. But the Vanguard (VXUS) fund gives investors better reasons to own it than the iShares (IEMG).
VXUS delivered a better five-year total return (including dividend reinvestment) than IEMG, while experiencing a less severe drawdown. This may reflect its broader mandate to invest in developed and emerging markets, whereas IEMG focuses on emerging markets.
VXUS also offers a lower expense ratio and a higher dividend yield, which can pad investors’ returns. Unless investors see good reasons why emerging markets will outperform over the next five years, it’s hard to see a good reason to choose IEMG.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
