The Vanguard Total International Stock ETF (VXUS 1.72%) and iShares MSCI Emerging Markets ETF(EEM 3.08%) differ sharply on cost, yield, diversification, and risk, with EEM focusing on emerging markets and VXUS spanning the entire non-U.S. globe.
The Vanguard Total International Stock ETF aims to give investors broad international diversification, tracking stocks from both developed and emerging markets outside the U.S., while the iShares MSCI Emerging Markets ETF targets only large- and mid-cap stocks from emerging economies. This comparison highlights the practical trade-offs between global breadth and emerging market concentration.
Snapshot (cost & size)
| Metric | VXUS | EEM |
|---|---|---|
| Issuer | Vanguard | IShares |
| Expense ratio | 0.05% | 0.72% |
| 1-yr return (as of 2026-02-04) | 31.4% | 36.2% |
| Dividend yield | 3.0% | 2.1% |
| AUM | $606.2 billion | $26.95 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 looks far more affordable, charging 0.05% compared to EEM’s 0.72%, and VXUS also offers a higher dividend yield — 3.0% versus 2.1% — which may appeal to cost-conscious or income-focused investors.
Performance & risk comparison
| Metric | VXUS | EEM |
|---|---|---|
| Max drawdown (5 y) | (29.43%) | (39.82%) |
| Growth of $1,000 over 5 years | $1,277 | $1,046 |
What's inside
EEM focuses on emerging markets, with technology (28%), financial services (22%), and consumer cyclical (12%) as its leading sectors. It holds 1,214 stocks, with Taiwan Semiconductor Manufacturing making up 12.42%, followed by Samsung Electronics Ltd. at 4.85%, and Tencent Holdings Ltd. at 4.21%. The fund is over 22 years old and has no unusual structural quirks.
VXUS, by contrast, covers a broader swath of the international market, including both developed and emerging economies. Its portfolio tilts toward financial services (23%), industrials (16%), and technology (15%), and it is far more diversified with 8,602 holdings. Its largest positions — Taiwan Semiconductor Manufacturing, Tencent Holdings Ltd., and ASML Holding — each make up a smaller slice of the fund, reflecting its wider reach.
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What this means for investors
Although the Vanguard Total International Stock ETF (VXUS) and the iShares MSCI Emerging Markets ETF (EEM) both target international stocks, they are for very different types of investors.
EEM is for aggressive investors seeking the high growth potential offered by emerging markets, and are willing to pay a larger expense ratio for that exposure. EEM’s higher one-year return compared to VXUS illustrates the ETF’s strength.
However, over the long run, EEM suffered a higher max drawdown, demonstrating the greater risk inherent in emerging markets due to factors such as increased political and currency fluctuations compared to developed markets. Therefore, EEM is better suited for short-term investing.
VXUS is a better choice for investors who want an international ETF to buy and hold for the long term. Its more rounded holdings across both developed and emerging markets contribute to greater stability, and its low expense ratio make it an affordable fund to keep for the long haul. It also offers a more attractive dividend yield for income-minded investors.
