Vanguard vs. iShares: Is VWO or IEMG the Better Emerging Markets ETF?

2 months ago 51

Josh Kohn-Lindquist, The Motley Fool

Sun, December 21, 2025 astatine 11:08 AM CST 5 min read

IEMG charges a somewhat higher disbursal ratio than VWO, but remains competitively priced for wide emerging markets exposure.
Recent one-year full returns favour IEMG, though VWO has experienced a smaller five-year maximum drawdown.
Both funds are wide diversified, but VWO holds doubly arsenic galore stocks.
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Vanguard FTSE Emerging Markets ETF (NYSEMKT:VWO) and iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) disagree connected disbursal ratio, the fig of holdings, and caller performance, with VMO offering broader banal coverage, portion IEMG has delivered stronger one-year returns.

Both VWO and IEMG are large, highly liquid exchange-traded funds tracking emerging marketplace stocks, aiming to supply investors with a diversified involvement successful fast-growing economies extracurricular developed markets. While their assemblage allocations and apical holdings are similar, subtle differences successful holdings count, cost, and caller risk-adjusted returns whitethorn entreaty to antithetic types of investors looking for wide planetary exposure.

Metric

VWO

IEMG

Issuer	Vanguard	iShares
Expense ratio	0.07%	0.09%
1-yr instrumentality (as of Dec. 19, 2025)	23.1%	29.2%
Dividend yield	2.83%	2.80%
Beta	0.88	0.97
AUM	$141 billion	$117 billion

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The one-year instrumentality represents full instrumentality implicit the trailing 12 months.

VWO is modestly much affordable with its little disbursal ratio, portion IEMG is priced astatine a flimsy premium but inactive competes good connected cost. VWO’s output edges retired IEMG by a tiny margin, which whitethorn entreaty to income-focused investors.

Metric

VWO

IEMG

Max drawdown (5 y)	(34.3%)	(37.1%)
Growth of $1,000 implicit 5 years	$1,255	$1,250

IEMG holds astir 2,725 stocks, providing wide vulnerability crossed emerging markets with its largest assemblage allocations successful exertion (26%), fiscal services (21%), and user cyclicals (12%). Its apical positions see Taiwan Semiconductor Manufacturing, Tencent Holdings, and Samsung Electronics, and the money has been operating for 13 years.

VWO is likewise diversified but with a overmuch broader portfolio of 6,146 holdings. Its assemblage weightings are astir identical, led by exertion (23%), fiscal services (21%), and user cyclicals (13%). The largest positions for VWO are Taiwan Semiconductor Manufacturing, Tencent Holdings, and Alibaba Group Holdings.

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