The Vanguard Total International Stock ETF (VXUS) Offers Broader Global Exposure Than the iShares MSCI Emerging Markets ETF (EEM)

Core Insights - The Vanguard Total International Stock ETF (VXUS) offers lower fees and broader international diversification compared to the iShares MSCI Emerging Markets ETF (EEM), which targets only emerging markets at a higher expense [1][4] Cost Comparison - VXUS has an expense ratio of 0.05%, while EEM's expense ratio is 0.72%, making EEM's costs over 14 times higher than VXUS [3][4] - VXUS has a 1-year return of 29.5% and a dividend yield of 3.0%, compared to EEM's 36.8% return and 2.0% yield [3][8] - Assets Under Management (AUM) for VXUS is $573.7 billion, significantly larger than EEM's $27.0 billion [3] Performance & Risk Comparison - Over the past 5 years, VXUS experienced a maximum drawdown of -29.43%, while EEM had a drawdown of -39.82% [5] - An investment of $1,000 would have grown to $1,297 in VXUS and $1,079 in EEM over the same period [5] Portfolio Composition - EEM holds around 1,200 stocks with a sector mix heavily weighted towards technology (28%), financial services (22%), and consumer cyclicals (12%) [6] - VXUS contains over 8,600 stocks with a more balanced sector exposure: financial services (23%), industrials (16%), and technology (15%) [7] - The largest positions in EEM are concentrated in a few Asian tech companies, while VXUS has a more diversified portfolio with less single-name risk [7] Recent Performance - Despite its cost advantage, VXUS has not outperformed EEM in the past year, with EEM gaining 39.8% compared to VXUS's 31.9% [8]