Better International ETF: Vanguard's VXUS vs. iShares' EEM

Expense, sector mix, and risk set these ETFs apart for investors weighing broad international exposure against emerging market focus.The Vanguard Total International Stock ETF (VXUS +0.33%) and iShares MSCI Emerging Markets ETF(EEM +0.43%) differ sharply on cost, yield, diversification, and risk, with EEM focusing on emerging markets and VXUS spanning the entire non-U.S. globe.The Vanguard Total International Stock ETF aims to give investors broad international diversification, tracking stocks from both developed and emerging markets outside the U.S., while the iShares MSCI Emerging Markets ETF targets only large- and mid-cap stocks from emerging economies. This comparison highlights the practical trade-offs between global breadth and emerging market concentration.Snapshot (cost & size)MetricVXUSEEMIssuerVanguardISharesExpense ratio0.05%0.72%1-yr return (as of 2026-02-04)31.4%36.2%Dividend yield3.0%2.1%AUM$606.2 billion$26.95 billionBeta 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.VXUS looks far more affordable, charging 0.05% compared to EEM’s 0.72%, and VXUS also offers a higher dividend yield — 3.0% versus 2.1% — which may appeal to cost-conscious or income-focused investors.Performance & risk comparisonMetricVXUSEEMMax drawdown (5 y)(29.43%)(39.82%)Growth of $1,000 over 5 years$1,277$1,046What's insideEEM focuses on emerging markets, with technology (28%), financial services (22%), and consumer cyclical (12%) as its leading sectors. It holds 1,214 stocks, with Taiwan Semiconductor Manufacturing making up 12.42%, followed by Samsung Electronics Ltd. at 4.85%, and Tencent Holdings Ltd. at 4.21%. The fund is over 22 years old and has no unusual structural quirks.VXUS, by contrast, covers a broader swath of the international market, including both developed and emerging economies. Its portfolio tilts toward financial services (23%), industrials (16%), and technology (15%), and it is far more diversified with 8,602 holdings. Its largest positions — Taiwan Semiconductor Manufacturing, Tencent Holdings Ltd., and ASML Holding — each make up a smaller slice of the fund, reflecting its wider reach.For more guidance on ETF investing, check out the full guide at this link.What this means for investorsAlthough the Vanguard Total International Stock ETF (VXUS) and the iShares MSCI Emerging Markets ETF (EEM) both target international stocks, they are for very different types of investors.EEM is for aggressive investors seeking the high growth potential offered by emerging markets, and are willing to pay a larger expense ratio for that exposure. EEM’s higher one-year return compared to VXUS illustrates the ETF’s strength.However, over the long run, EEM suffered a higher max drawdown, demonstrating the greater risk inherent in emerging markets due to factors such as increased political and currency fluctuations compared to developed markets. Therefore, EEM is better suited for short-term investing.VXUS is a better choice for investors who want an international ETF to buy and hold for the long term. Its more rounded holdings across both developed and emerging markets contribute to greater stability, and its low expense ratio make it an affordable fund to keep for the long haul. It also offers a more attractive dividend yield for income-minded investors.Read NextFeb 7, 2026 •By Jake LerchEEM vs. VXUS: Should Investors Favor Emerging Markets Upside or Broad International Stability?Feb 3, 2026 •By Cory RenauerThe Vanguard Total International Stock ETF (VXUS) Offers Broader Global Exposure Than the iShares MSCI Emerging Markets ETF (EEM)Jan 26, 2026 •By Adé HennisHow Does This Eco-Friendly ETF Match Up Against This International Fund?Jan 26, 2026 •By Adé HennisEEM Offers More Of An Internation Focus on Tech Than IXUSJan 25, 2026 •By Matt DiLalloWant to Add Emerging Markets To Your Portfolio? EEM Offers a Tech Focus While SCHE Is More AffordableJan 25, 2026 •By Matt DiLalloWant to Invest Globally? IEFA Offers Broader Diversification Than EEM.About the AuthorRobert "Izzy" Izquierdo is a contributing Motley Fool stock market analyst covering information technology, consumer discretionary, consumer staples, and communication services sectors. Prior to The Motley Fool, Izzy was head of product management at Target Media Partners, developing and launching multimillion-dollar software used by businesses such as Charter Communications. Prior to that, he worked at Yahoo! and startups on software products in connected TV, AI, consumer apps, and digital advertising. He holds a bachelor’s degree in English literature from UCLA and is certified in software product management.TMFWryWriteStocks MentionediShares - iShares Msci Emerging Markets ETFNYSEMKT: EEM$61.12 (+0.43%) $+0.26Vanguard Total International Stock ETFNASDAQ: VXUS$82.40 (+0.33%) $+0.27*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.