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

The Vanguard Total International Stock ETF (NASDAQ:VXUS) and the iShares MSCI Emerging Markets ETF (NYSEMKT:EEM) disagree sharply connected cost, marketplace coverage, and risk: VXUS offers little fees and broader planetary diversification, portion EEM targets lone emerging markets astatine a importantly higher expense.

VXUS aims to way the FTSE Global All Cap ex US Index, giving investors vulnerability to thousands of developed and emerging marketplace stocks extracurricular the United States. In contrast, EEM focuses specifically connected large- and mid-cap companies from emerging economies. This examination explores which attack whitethorn entreaty depending connected your goals for planetary equity exposure.

The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

EEM’s disbursal ratio is much than 14 times higher than VXUS, making VXUS considerably much affordable for semipermanent investors. VXUS besides provides a higher dividend yield, which whitethorn entreaty to those seeking much income from their planetary allocation.

EEM holds astir 1,200 stocks and has existed for astir 23 years, providing targeted entree to emerging marketplace equities. Its assemblage premix leans heavy connected exertion (28%), fiscal services (22%), and user cyclicals (12%). Top positions see Taiwan Semiconductor Manufacturing (NYSE:TSM) astatine 12.39%, Samsung Electronics Ltd (OTC:SSNL.F) astatine 4.71%, and Tencent Holdings Ltd (OTC:TCEHY) astatine 4.43%, exposing investors to a concentrated radical of Asian tech and net giants.

VXUS, by comparison, holds implicit 8,600 stocks crossed some developed and emerging markets, with much balanced assemblage exposure: fiscal services (23%), industrials (16%), and exertion (15%). Its largest positions — Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, and ASML Holding NV (NASDAQ:ASML) — are overmuch little ascendant successful the portfolio, reflecting broader diversification and little single-name risk.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.

A beardown outgo vantage for the Vanguard Total International Stock ETF hasn’t helped it outperform the Vanguard Total International Stock ETF implicit the past 12 months. The iShares MSCI Emerging Markets ETF has gained 39.8% implicit the past twelvemonth compared to a somewhat little satisfying summation of 31.9% for the Vanguard Total International Stock ETF.