IEMG Holds More Assets and Stocks Than SCHE
Key Points
The iShares Core MSCI Emerging Markets ETF (IEMG) commands a much larger asset base and higher liquidity than the Schwab Emerging Markets Equity ETF (SCHE).
IEMG experienced a slightly deeper drawdown over five years.
Both funds have nearly identical sector mixes but small differences in top holdings and yield.
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The iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) and Schwab Emerging Markets Equity ETF (NYSEMKT:SCHE) both target broad emerging market equities, but IEMG stands out for its much larger assets under management, higher daily trading volume, and a modestly higher expense ratio.
Both IEMG and SCHE provide diversified exposure to emerging markets, tracking thousands of stocks across technology, financials, and consumer sectors. This comparison highlights nuanced differences in costs, returns, risk, and portfolio structure to help investors understand which ETF best aligns with their needs.
Snapshot (cost & size)
| Metric | SCHE | IEMG |
|---|---|---|
| Issuer | Schwab | IShares |
| Expense ratio | 0.07% | 0.09% |
| 1-yr return (as of Feb. 12, 2026) | 31.3% | 41.7% |
| Dividend yield | 2.68% | 2.48% |
| AUM | $12 billion | $144 billion |
| Beta | 0.87 | 0.98 |
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.
SCHE is slightly more affordable on fees, with a 0.07% expense ratio compared to IEMG’s 0.09%, while SCHE also offers a modestly higher dividend yield at 2.7% versus IEMG’s 2.5%.
Performance & risk comparison
| Metric | SCHE | IEMG |
|---|---|---|
| Growth of $1,000 over 5 years | $1,313 | $1,417 |
| Max 5-year drawdown | (35.7%) | (37.1%) |
What's inside
IEMG holds 2,674 stocks and spreads its assets primarily across technology (30%), financial services (20%), and consumer discretionary (11%) sectors. Its largest positions are Taiwan Semiconductor Manufacturing (2330.SR) at 11.4%, Samsung Electronics Ltd (005930.KS) at 4.5%, and Tencent Holdings Ltd (0700.HK) at 3.3%. With over 13 years on the market and no unusual fund quirks, IEMG covers a broad emerging market landscape.
SCHE, while holding 2,165 stocks, shows a similar sector allocation with technology (24%), financial services (23%), and consumer discretionary (13%) making up the bulk. Its top holdings include Taiwan Semiconductor Manufacturing (2330.TW) at 14.3%, Tencent Holdings Ltd (0700.HK) at 4.1%, and Alibaba Group Holding Ltd (9988.HK) at 3.5%. Both funds offer diversified baskets, but IEMG includes more stocks and a slightly different weighting among its largest positions.
For more guidance on ETF investing, check out the complete guide at this link.
What this means for investors
These emerging market funds are solid choices for investors looking for greater exposure to international growth. Both offer rock-bottom costs and similar returns over the past five years.
IEMG slightly edges out SCHE on trailing five-year returns, including dividend reinvestment. It’s somewhat more diversified and has significantly more assets under management. However, more holdings and greater assets haven’t translated into lower volatility, as evidenced by IEMG’s higher beta.
Investors who are sticklers for expense and maximum yield may find SCHE more appealing. The slightly lower expense ratio can add up over many years, and its trailing dividend yield of 2.7% edges out IEMG’s 2.5%.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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