SPGM vs EEM: Does Global Large Cap Diversification Beat Emerging Markets Focus in 2026?

Comparison between State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) and iShares MSCI Emerging Markets ETF (NYSEMKT:EEM) hinges on whether an investor wants targeted, higher-cost emerging markets exposure or broad, low-cost global diversification.

These two funds provide access to international equities but with significantly different geographic scopes. One targets developing economies exclusively, while the other serves as a diversified core holding for stocks across both established and developing nations worldwide.

Snapshot (cost & size)

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 as of the close of trading on July 27.

The State Street SPDR Portfolio MSCI Global Stock Market ETF is substantially more affordable, carrying an expense ratio of 0.09% compared to 0.72% for the iShares fund. Both ETFs currently provide a matching trailing-12-month dividend yield of 1.80%.

Performance & risk comparison

What's inside

The State Street SPDR Portfolio MSCI Global Stock Market ETF (SPGM) provides exposure to stocks across the globe. Sector weights include technology at 31%, financial services at 17%, and industrials at 13%. With 2,923 holdings, the top positions include Nvidia Corp (NASDAQ:NVDA) at 4.1%, Apple Inc (NASDAQ:AAPL) at 3.8%, and Microsoft Corp (NASDAQ:MSFT) at 2.3%. The fund was launched in 2012. State Street SPDR Portfolio MSCI Global Stock Market ETF has paid $1.54 per share over the trailing 12 months, which on its recent ~$84.34 share price works out to a 1.80% yield.

The iShares MSCI Emerging Markets ETF (EEM) focuses exclusively on developing economies. Its allocation includes technology at 46%, financial services at 18%, and consumer cyclical stocks at 7%. Top holdings include Taiwan Semiconductor Manufacturing at 15.1%, Samsung Electronics at 8.1%, and the South Korean listing of SK Hynix at 7.6%. The fund was launched in 2003. It currently reports 1,190 holdings. iShares MSCI Emerging Markets ETF has paid $1.11 per share over the trailing 12 months, which, on its recent ~$63.62 share price, works out to a 1.80% yield.

Which fund is the better buy?

These two funds provide similar exposure to equity markets around the world, but they have key differences that investors should consider before investing.

Stylistically, both funds are heavily weighted toward large-cap stocks, with the iShares MSCI Emerging Markets ETF (EEM) holding 92% of its assets in large caps, while the level is 78% for the State Street SPDR Portfolio MSCI Global Stock Market ETF (SPGM). Both are also less weighted in their top 10 than you find in other ETFs, with EEM allocating 37% of its portfolio to its top 10, while SPGM dedicates 21% of its assets to its top 10.

The major difference between them is the geographic exposure they provide to investors. SPGM is two-thirds U.S.-listed equities, 31% developed, non-U.S. markets, and the balance emerging markets. EEM has about 50% of its holdings in non-U.S. developed markets and just 1% in U.S. stocks. Just about 49% of the fund is in emerging markets.

If none of those differences tips the scale for investors, then performance should. EEM is benefiting from the outsize growth of non-U.S. markets in recent years, a trend to be expected given its focus on less-developed markets. It has returned 26% year-to-date, compared with about 12% for SPGM, and it also has the superior 1-year performance detailed earlier. EEM also outperforms SPGM over the 3-year time frame, with annualized returns of 22.9% versus 20.2%. Long-term however. SPGM has bested EEM, returning 11.4% and 13.1% in the 5-year and 10-year look-backs compared to 5- and 10-year gains of of 6.9% and 9.6%, respectively, for EEM.

The recent performance of EEM is appealing, but the long-term gains of SPGM, plus its lower expense ratio, make it the better fund for 2026.

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

Brendan Coffey 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.