Vanguard FTSE Developed Markets ETF (NYSEMKT:VEA) and iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) offer distinct ways to diversify a portfolio beyond U.S. borders with low-cost, broad-market strategies.
While both funds target international equities, they focus on different economic tiers. The Vanguard fund invests in established markets such as Canada, Europe, and the Pacific region. In contrast, the iShares fund tracks developing economies, which can offer higher growth potential alongside higher geopolitical and currency risks.
Snapshot (cost & size)
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 more affordable with an expense ratio of 0.03%, compared to 0.09% for the iShares fund. It also offers a higher payout, with a yield gap of +0.20 ppt over its counterpart.
Performance & risk comparison
What’s inside
Vanguard FTSE Developed Markets ETF provides exposure to financial services (24%), industrials (18%), and technology (16%). It holds 3,873 stocks, and its largest positions include Samsung Electronics Co Ltd at 2.61%, SK Hynix Inc at 2.01%, and ASML Holding NV at 1.96%. The fund was launched in 2007. Vanguard FTSE Developed Markets ETF has paid $1.70 per share over the trailing 12 months, which, on its recent ~$70.35 share price, works out to a 2.4% yield.
iShares Core MSCI Emerging Markets ETF leans more heavily into technology at 42%, followed by financial services at 18% and consumer cyclical at 8%. It holds 2,862 stocks, and its top holdings include Taiwan Semiconductor Manufacturing at 14.01%, Samsung Electronics Ltd at 6.50%, and SK Hynix at 4.93%. This fund was launched in 2012. iShares Core MSCI Emerging Markets ETF has paid $1.80 per share over the trailing 12 months, which, on its recent ~$81.40 share price, works out to a 2.2% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
When comparing the Vanguard FTSE Developed Markets ETF (VEA) and the iShares Core MSCI Emerging Markets ETF (IEMG), investors should consider several key factors. Let’s see what they tell us about each fund.
