Comparing Vanguard Total World Stock ETF (NYSEMKT:VT) and iShares MSCI Emerging Markets ETF (NYSEMKT:EEM) reveals a trade-off between broad global diversification and concentrated emerging market exposure at a higher cost.
While both funds offer significant exposure to international stocks, they serve different strategic roles in a portfolio. iShares MSCI Emerging Markets ETF focuses strictly on the volatile but high-growth potential of developing economies like China and South Korea. Conversely, Vanguard Total World Stock ETF provides a "one-stop shop" for global equity exposure across all market caps.
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.
Vanguard Total World Stock ETF is the far more affordable option for long-term investors, featuring an expense ratio of 0.06% compared to 0.72% for iShares MSCI Emerging Markets ETF. The trailing-12-month dividend yields are very similar, showing only a 0.12 percentage point difference between the two funds.
Vanguard Total World Stock ETF holds 10,070 stocks, seeking to track the FTSE Global All Cap Index. Its largest positions include Nvidia (NASDAQ:NVDA) at 4%, Apple (NASDAQ:AAPL) at 3.59%, and Microsoft (NASDAQ:MSFT) at 2.38%. The portfolio is diversified across various sectors, including Technology (31%), Financial Services (16%), and Industrials (12%). The fund was launched in 2008. Vanguard Total World Stock ETF has paid $2.48 per share over the trailing 12 months, which on its recent ~$156.13 share price works out to a 1.60% yield.
iShares MSCI Emerging Markets ETF aims to replicate an index of large and mid-sized companies in emerging markets, holding 1,225 stocks. Its top holdings include Taiwan Semiconductor Manufacturing (2330.TW) at 15.37%, Samsung Electronics Ltd (005930.KS) at 7.24%, and SK Hynix (000660.KS) at 6.37%. Primary sector concentrations for the fund include Technology (46%), Financial Services (18%), and Consumer Cyclical (7%). The fund was launched in 2003. iShares MSCI Emerging Markets ETF has paid $1.11 per share over the trailing 12 months, which on its recent ~$64.19 share price works out to a 1.70% yield.
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