Better International ETF: iShares' IEMG vs. State Street's SPGM

The State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) and iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) differ materially in geographic focus, sector exposure, and risk profile, despite sharing the same low expense ratio.

SPGM is designed to provide broad, diversified exposure to both developed and emerging global equities, making it a core holding for many investors seeking to track the entire global market.

IEMG, in contrast, narrows its focus to emerging market stocks, offering targeted access to faster-growing but potentially more volatile regions. This comparison explores how these differences play out across cost, performance, risk, and portfolio makeup.

Snapshot (cost & size)

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.

Both SPGM and IEMG are priced at a very competitive 0.09% expense ratio, but IEMG may appeal to income-focused investors with its higher 2.4% dividend yield compared to 1.8% for SPGM.

Performance & risk comparison

IEMG's five-year max drawdown is nearly 36%, reflecting the higher volatility typical of emerging markets. Over five years, $1,000 grew to $1,674 in SPGM versus $1,361 in IEMG, showing the impact of both risk and long-term performance.

What's inside

IEMG holds 2,725 stocks across emerging market regions, with a sector tilt toward technology (21%), basic materials (20%), and financial services (18%). Its largest positions — Taiwan Semiconductor Manufacturing at 11.75%, Samsung Electronics at 5.12%, and SK Hynix at 3.32% — dominate the fund, reflecting the heavy influence of Asian tech. The fund has a long track record, with 13.5 years since inception, and its top holdings point to a sizable tilt toward a handful of major companies.

SPGM, meanwhile, tracks a global index that blends developed and emerging markets, leaning 25% into technology, 17% into financial services, and 13% into industrials. Its portfolio is led by mega-cap names like Nvidia, Apple, and Microsoft, which together account for a significant slice of the fund. This broader approach may help smooth out country or sector-specific volatility.

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What this means for investors

For investors seeking to add international stocks to a portfolio, the State Street SPDR Portfolio MSCI Global Stock Market ETF (SPGM) and iShares Core MSCI Emerging Markets ETF (IEMG) can fulfill this goal. They deliver different strategies, so choosing between them comes down to which approach appeals to you.

IEMG targets emerging markets, which provide exposure to high-growth economies but greater volatility and risk as well. This ETF holds over 2,000 stocks, making it highly-diversified. Its more than $150 billion in assets under management grant it great liquidity. Its performance over the past year has been spectacular, and it sports a higher dividend yield than SPGM.

However, IEMG exposes you to greater currency risk against the U.S. dollar, and its max drawdown is larger. Also, its holdings in Chinese companies add to the ETF’s risks, given the rollercoaster relations between the U.S. and China over issues such as AI and tariffs.

SPGM is a truly global ETF since it encompasses both developed and emerging markets, including the U.S. This blend gives it lower volatility, and grants you exposure to global blue-chip companies. In exchange, it’s dividend yield is lower and it doesn’t hold the potential for the kind of explosive growth IEMG offers. It’s a solid fund for investors who want to balance risk and reward.

Robert Izquierdo has positions in Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.