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

Core Insights - The Vanguard Total International Stock ETF (VXUS) and the iShares Core MSCI Emerging Markets ETF (IEMG) provide diversified international equity exposure but differ in their approaches and underlying indexes [1] Cost & Size Comparison - VXUS has a lower expense ratio of 0.05% compared to IEMG's 0.09% [2] - As of February 3, 2026, VXUS reported a 1-year return of 33.16%, while IEMG had a higher return of 38.88% [2] - VXUS offers a higher dividend yield of 3.18% compared to IEMG's 2.75% [2] - VXUS has an Assets Under Management (AUM) of $573 billion, significantly larger than IEMG's $120 billion [2] Performance & Risk Comparison - VXUS experienced a maximum drawdown of -29.44% over 5 years, while IEMG had a larger drawdown of -37.11% [4] - An investment of $1,000 in VXUS would have grown to $1,288 over 5 years, compared to $1,094 for IEMG [4] Portfolio Composition - IEMG focuses on emerging markets with a significant technology sector allocation of 27%, featuring 2,672 holdings [5] - Major holdings in IEMG include Taiwan Semiconductor Manufacturing, Samsung Electronics, and Tencent [5] - VXUS encompasses both developed and emerging markets, with top sectors being financial services (23%), industrials (16%), and technology (15%), and includes 8,646 holdings [6] - Key holdings in VXUS are Taiwan Semiconductor Manufacturing, Tencent, and ASML, indicating a more diversified international approach [6] Implications for Investors - Both VXUS and IEMG provide exposure to international stocks, with VXUS offering broader diversification across over 8,000 stocks [7] - Greater diversification in VXUS can help limit risk by reducing the impact of volatility in specific industries [8] - IEMG's narrower focus may lead to higher returns due to less risk from underperforming stocks, with a stronger emphasis on technology [9]