Emerging Market Showdown: IEMG Offers Lower Fees Compared to EEM
Key Points
EEM charges a much higher expense ratio than IEMG for nearly identical sector exposure and performance
IEMG holds more than twice as many stocks, covering small-caps that EEM omits
EEM is highly liquid but its five-year risk-adjusted return trails IEMG’s, and its yield is slightly lower
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The iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) and the iShares MSCI Emerging Markets ETF (NYSEMKT:EEM) both target emerging market equities, but IEMG covers a broader set of stocks at a far lower fee while EEM delivers similar performance with a narrower large- and mid-cap focus.
Both IEMG and EEM aim to give investors exposure to emerging markets, but IEMG includes small-cap stocks and charges less than one-seventh the fee. This comparison highlights key differences in cost, portfolio breadth, risk, and recent returns to help investors decide which may better suit their needs.
Snapshot (cost & size)
| Metric | IEMG | EEM |
|---|---|---|
| Issuer | IShares | IShares |
| Expense ratio | 0.09% | 0.72% |
| 1-yr return (as of Mar. 24, 2026) | 25.5% | 26.2% |
| Dividend yield | 2.6% | 2.1% |
| AUM | $135.8 billion | $25.2 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
IEMG is notably more affordable with a 0.09% expense ratio compared to EEM’s 0.72%, and it also offers a higher dividend yield, paying out 2.6% versus EEM’s 2.1%.
Performance & risk comparison
| Metric | IEMG | EEM |
|---|---|---|
| Max drawdown (5 y) | (35.94%) | (37.82%) |
| Growth of $1,000 over 5 years | $1,106 | $1,089 |
What's inside
EEM focuses on large- and mid-cap emerging market stocks, with 1,223 holdings as of its 23rd year. Technology is the largest sector at 34%, followed by financial services (19%) and consumer cyclicals (9%). Top holdings include Taiwan Semiconductor Manufacturing (NYSE:TSM), Samsung Electronics Ltd (FRA:SSU), and Tencent Holdings Ltd (OTC:TCEHY), and there are no notable quirks or overlays.
IEMG extends exposure to small-cap companies, holding 2,725 stocks in total. Its sector mix is nearly identical—technology (32%), financial services (19%), and consumer cyclicals (10%)—with the same leading positions in Taiwan Semiconductor Manufacturing, Samsung Electronics Ltd, and Tencent Holdings Ltd. The key difference is IEMG’s broader reach and inclusion of smaller companies, which may appeal to those seeking more comprehensive market coverage.
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What this means for investors
For investors seeking exposure to emerging markets stocks, iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares MSCI Emerging Markets ETF (EEM) are both emerging market exchange-traded funds (ETFs) worthy of consideration. Here’s how they matchup with each other.
IEMG’s biggest edge is its expense ratio. IEMG has an expense ratio of only 0.09%, while its rival’s expense ratio is 0.72%. That means those who invest $10,000 in IEMG will pay $9 in fees per year, while those who invest $10,000 in EEM will pay $72 per year. What’s more, IEMG also boasts a higher dividend yield of 2.6%, while EEM has a dividend yield of 2.1%.
For EEM, recent performance is its main edge. EEM has generated a one-year return of 26.2%, while its rival has generated 25.6%.
In summary, most investors will favor IEMG, due to the lower fees and greater dividend yield. However, some investors may be swayed by EEM’s better recent performance.
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Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing and Tencent. The Motley Fool has a disclosure policy.
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