IEMG vs. VXUS: Which International ETF Is the Better Buy Right Now?

The **Vanguard Total International Stock ETF **(VXUS 0.36%) and the iShares Core MSCI Emerging Markets ETF (IEMG 0.65%) both aim to provide diversified international equity exposure, but their approaches and underlying indexes set them apart.

This comparison examines how each fund’s costs, returns, risk, and portfolio makeup may appeal to different investor objectives.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

VXUS is more affordable in terms of fees, with a lower expense ratio. It also offers a higher dividend yield, which could appeal to income-focused investors.

Performance & risk comparison

What’s inside

IEMG targets emerging markets with a pronounced tilt toward technology, which makes up 27% of its portfolio. With 2,672 holdings, its largest positions are Taiwan Semiconductor Manufacturing, Samsung Electronics, and Tencent. The fund provides broad exposure but is more concentrated than many international funds.

VXUS, in contrast, spans both developed and emerging markets, with financial services (23%), industrials (16%), and technology (15%) as its top sectors. Its largest holdings include Taiwan Semiconductor Manufacturing, Tencent, and ASML, reflecting a more diversified international approach across 8,646 holdings.

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

What this means for investors

Global ETFs can provide broad exposure to stocks outside the U.S., and emerging markets stocks could be poised for significant growth. VXUS and IEMG both focus on emerging markets to an extent, but there are a few key differences to consider.

VXUS is far broader, with over 8,000 stocks spanning both emerging and developed markets. It provides exposure to a slice of the entire international market, maximizing diversification.

The advantage of this approach is that it can help limit risk, as greater diversification can reduce the impact of volatility within particular industries. Developed markets also tend to be more stable than emerging markets, further mitigating risk.

That said, IEMG’s narrower approach could yield higher returns, as there’s less risk that underperforming stocks will drag down the fund’s earnings. IEMG is also more heavily tilted toward technology than VXUS, which can be more lucrative.

Where you might choose to invest depends on what you’re looking for in an ETF. Investors seeking access solely to emerging markets may prefer IEMG, while VXUS could be a better fit for those looking for maximum international diversification.