Thanks to strong performance in 2025 and so far in 2026, emerging markets (EMs) are back on investors' radars. No longer are they just considered a high-risk, low-return investment. Investors looking for relative value, healthy growth prospects, and even some yield are considering emerging markets as a major opportunity.
There are several strong contenders if you're looking to add emerging markets to your portfolio. The top one may be the Vanguard FTSE Emerging Markets ETF (VWO 2.25%). Its combination of diversified regional coverage and ultra-low fees make it an ideal choice for anyone looking to add exposure.
Does this exchange-traded fund work better than the other major players? Let's break them down to see how similar or, more importantly, how different they are from each other.
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Vanguard FTSE Emerging Markets ETF
This fund tracks an index that currently represents nearly two dozen countries and 6,000 stocks. The fund is, however, heavily concentrated in just three countries: China (32%), Taiwan (23%), and India (20%). That's fairly common among the big emerging markets ETFs, though, and shouldn't be considered a red flag. For pure diversification, there are few ETFs that do it better. It has an expense ratio of 0.06%.
NYSEMKT: VWO
Key Data Points
There's one thing that investors should be aware of, because it affects what an emerging markets ETF could look like. The Vanguard ETF does not consider South Korea to be an emerging market. Depending upon the index or strategy used, some EM funds will include South Korea, so you need to dig into the details to see if yours does. The difference could be a 0% allocation to South Korea or a 15% allocation.
iShares MSCI Emerging Markets ETF
The iShares MSCI Emerging Markets ETF (EEM 3.20%) tracks an index that includes South Korea, so other country allocations here are proportionally lower. It also holds just 1,200 stocks. Diversification would appear to be less here, but the ones being excluded compared to the Vanguard ETF are small- and micro-cap stocks whose performance is largely inconsequential to fund returns.
This ETF charges an extraordinarily high 0.72% expense ratio, which should remove it from consideration for most retail investors.
iShares Core MSCI Emerging Markets ETF
The iShares Core MSCI Emerging Markets ETF (IEMG 3.18%) follows a slightly different index from its iShares sister fund above, but exposure is substantially the same (it also includes South Korea).
NYSEMKT: IEMG
Key Data Points
The big difference is that its expense ratio is only 0.09%, making it much more competitive with Vanguard.
State Street SPDR Portfolio Emerging Markets ETF
The State Street SPDR Portfolio Emerging Markets ETF (SPEM 2.22%) has the most individual stocks held in our list of ETFs with more than 7,200. From a high level though, the sector and country exposures are very similar to those of the Vanguard ETF. It also excludes South Korea, so the Vanguard fund is its closest comp.
NYSEMKT: SPEM
Key Data Points
It comes with an expense ratio of 0.07%.
Which emerging markets ETF is the winner?
It's strange to think that choosing an emerging markets ETF comes down to how you feel about South Korea, but it just might.
When it comes to broadly diversified, core ETFs, low cost usually wins. That would edge Vanguard ahead, but the difference between the three ultra-cheap options is razor-thin.
If you're compelled to own South Korea, the iShares Core MSCI Emerging Markets ETF would be my winner. If you don't care, the Vanguard FTSE Emerging Markets ETF would be my choice.
