Better iShares International ETF: IEFA vs. IEMG
Key Points
IEFA charges a slightly lower expense ratio and offers a higher dividend yield than IEMG.
IEMG has delivered a stronger one-year return but with a steeper five-year drawdown.
IEFA tilts toward developed markets, with more exposure to financials and industrials, while IEMG leans into emerging market tech and materials.
- 10 stocks we like better than iShares Trust - iShares Core Msci Eafe ETF ›
The iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) and iShares Core MSCI EAFE ETF (NYSEMKT:IEFA) both provide broad international equity exposure, but differ on cost, yield, and their focus on emerging versus developed markets.
IEMG and IEFA are popular choices for investors seeking global diversification outside the United States, but their approaches diverge. IEMG targets emerging markets, while IEFA covers developed markets outside the United States and Canada. This comparison highlights how each ETF stacks up on fees, returns, risk, and portfolio makeup.
Snapshot (cost & size)
| Metric | IEMG | IEFA |
|---|---|---|
| Issuer | iShares | iShares |
| Expense ratio | 0.09% | 0.07% |
| 1-yr return (as of Apr. 16, 2026) | 53.2% | 33.9% |
| Dividend yield | 2.7% | 3.5% |
| Beta | 0.93 | 0.95 |
| AUM | $134.1 billion | $169.6 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The one-year return represents total return over the trailing twelve months.
IEFA looks a bit more affordable on fees, with a 0.07% expense ratio compared to IEMG’s 0.09%. IEFA also offers a higher dividend yield, which may appeal to income-focused investors.
Performance & risk comparison
| Metric | IEMG | IEFA |
|---|---|---|
| Max drawdown (five years) | (35.94%) | (30.41%) |
| Growth of $1,000 over five years | $1,352 | $1,500 |
What's inside
IEFA holds 2,626 developed-market stocks, excluding the United States and Canada, and has been operating for over thirteen years. Its portfolio skews toward financial services (23%), industrials (20%), and healthcare (10%), with leading positions in ASML, HSBC, and AstraZeneca. The fund’s broad sector coverage and higher yield could suit those seeking steady developed-market exposure.
By contrast, IEMG covers 2,725 stocks across emerging markets, with the largest weights in basic materials, technology, and financial services. Top holdings include Taiwan Semiconductor Manufacturing, Samsung Electronics, and SK Hynix, resulting in a stronger tech and materials tilt. IEMG’s emerging market focus brings different economic cycles and growth dynamics compared to IEFA’s developed-market approach.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
An exchange-traded fund is a good way to gain exposure to international stocks, allowing you to invest in a number of companies efficiently. When it comes to an internationally-focused ETF, choosing between the iShares Core MSCI Emerging Markets ETF (IEMG) and iShares Core MSCI EAFE ETF (IEFA) comes down to your investment goals.
IEFA targets stocks in developed countries outside North America. As a result, it offers greater stability and reduced risk, as demonstrated by its lower max drawdown. It also boasts a superior dividend yield and lower expense ratio. The tradeoff is that IEFA doesn’t deliver the same kind of growth as IEMG, as exemplified by the lower one-year return.
Because IEMG focuses on emerging markets, its stocks have greater potential for growth, as its superior one-year return illustrates. However, the nature of emerging markets means the fund can experience larger volatility.
Given each’s characteristics, IEFA is better-suited for conservative, income-focused investors, while IEMG is for growth-oriented investors who have a higher risk tolerance. In fact, both ETFs are worth investing in to provide you with complete international exposure; IEFA can act as your core, income-oriented fund, and IEMG complementing with its growth stocks.
Should you buy stock in iShares Trust - iShares Core Msci Eafe ETF right now?
Before you buy stock in iShares Trust - iShares Core Msci Eafe ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Core Msci Eafe ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $524,786!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,236,406!*
Now, it’s worth noting Stock Advisor’s total average return is 994% — a market-crushing outperformance compared to 199% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 18, 2026.
HSBC Holdings is an advertising partner of Motley Fool Money. Robert Izquierdo has positions in ASML and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends ASML, AstraZeneca Plc, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.
Recommended Articles
