Looking Beyond the S&P 500? These 2 International ETFs Offer Very Different Opportunities

Source Motley_fool

Key Points

  • State Street SPDR Portfolio Developed World ex-US ETF offers exposure to established international economies, with a lower expense ratio and higher dividend yield.

  • iShares Core MSCI Emerging Markets ETF provides greater exposure to developing economies and technology leaders, but this comes with additional risks.

  • Both ETFs provide international diversification, but their geographic exposure, sector concentrations, and risk profiles could lead to different long-term outcomes.

  • 10 stocks we like better than iShares - iShares Core Msci Emerging Markets ETF ›

State Street SPDR Portfolio Developed World ex-US ETF (NYSEMKT:SPDW) targets established international economies with extremely low fees, while iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) provides exposure to higher-growth developing nations.

Investors seeking international diversification must often decide between established developed markets and faster-growing emerging economies. While both the State Street and iShares funds provide broad exposure outside the United States, they target different geographic regions and risk profiles. This comparison examines how their costs, yields, and underlying holdings differ.

Snapshot (cost & size)

MetricIEMGSPDW
IssueriSharesSPDR
Share price$78.09 (as of 2026-10-15)$49.52 (as of 2026-10-15)
Expense ratio0.09%0.03%
1-yr return (as of Oct. 15, 2026)20.3%18.5%
Dividend yield2.4%3.1%
Beta0.760.86
AUM$154.5 billion$40.8 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The State Street fund is significantly more affordable, with an expense ratio of 0.03% that undercuts the 0.09% fee charged by the iShares ETF. It also offers a more significant income stream, with a trailing yield 0.84 percentage points higher.

Performance & risk comparison

MetricIEMGSPDW
Max drawdown (5 yr)(32.7%)(29.8%)
Growth of $1,000 over 5 years (total return)$1,417$1,557

What's inside

State Street SPDR Portfolio Developed World ex-US ETF focuses on major economies like Japan, the United Kingdom, and Canada. Its portfolio is concentrated in financial services (25%), industrials (18%), and technology (15%). The fund holds 2,417 stocks, and its largest positions include Samsung Electronics (KOSE:A005930)) at 2.32%, ASML Holding (NASDAQ:ASML) at 1.95%, and SK Hynix (NASDAQ:SKHY) at 1.72%. It was launched in 2007. State Street SPDR Portfolio Developed World ex-US ETF has paid $1.52 per share over the trailing 12 months, which on its recent ~$49.52 share price works out to a 3.1% yield.

The iShares Core MSCI Emerging Markets ETF provides a different flavor of international exposure by tracking 2,801 companies in developing nations like China, India, and Brazil. It leans significantly more into technology at 42%, followed by financial services at 21% and consumer cyclicals at 8%. Top holdings include Taiwan Semiconductor Manufacturing (NYSE:TSM) at 13.99%, Samsung Electronics at 5.94%, and SK Hynix at 4.06%. It was launched in 2012. iShares Core MSCI Emerging Markets ETF has paid $1.80 per share over the trailing 12 months, which on its recent ~$78.09 share price works out to a 2.2% yield.

For more guidance on ETF investing, check out the full guide at this link.

Which looks like the better buy

Both funds offer compelling opportunities outside the U.S., but for long-term investors, the State Street SPDR Portfolio Developed World ex-US ETF looks like the better buy.

The iShares Core MSCI Emerging Markets ETF is certainly attractive given its substantial exposure to the semiconductor industry. Companies like Taiwan Semiconductor Manufacturing, Samsung Electronics, and SK Hynix are central to the global AI infrastructure buildout, providing investors with exposure to one of the most significant growth trends in today's market.

However, that opportunity comes with additional risks. Emerging markets remain sensitive to currency fluctuations, geopolitical uncertainty, and shifts in global investor sentiment. With roughly 42% of its portfolio concentrated in technology, the fund is also heavily dependent on the industry's continued strength.

Meanwhile, the State Street fund offers a considerably lower expense ratio of just 0.03%, a higher dividend yield, and exposure to established international economies. It also maintains holdings in semiconductor leaders, allowing investors to participate in the AI boom without concentrating so heavily on technology.

For investors looking to build a diversified international portfolio, State Street's ETF looks better positioned. The iShares fund may deliver greater upside, but the State Street SPDR Portfolio Developed World ex-US ETF offers a more balanced combination of income, cost efficiency, and long-term growth potential.

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RJ Fulton has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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