Both the iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) and iShares Core MSCI EAFE ETF (NYSEMKT:IEFA) They are designed as core holdings for international diversification, but IEMG targets emerging markets, while IEFA invests in developed markets outside North America. This comparison examines cost, recent performance, volatility and portfolio construction to help investors decide which fund best suits their overall allocation objectives.
|
Metric |
IEMG |
IEFA |
|---|---|---|
|
Editor |
IShares |
IShares |
|
Expense ratio |
0.09% |
0.07% |
|
1 year declaration (as of February 7, 2026) |
37.83% |
28.70% |
|
Dividend yield |
2.51% |
3.32% |
|
AUM |
$137.65 billion |
$171.77 billion |
Beta measures price volatility relative to the S&P 500; Beta is calculated from five-year weekly returns. The 1-year return represents the total return over the past 12 months.
IEMG has outperformed IEFA over the past 12 months, but IEFA has the higher dividend yield, and both funds have similar expense ratios.
|
Metric |
IEMG |
IEFA |
|---|---|---|
|
Maximum reduction (5 years) |
(37.16%) |
(30.41%) |
|
$1,000 growth in 5 years |
$1,073 |
$1,338 |
IEMG has delivered a stronger one-year total return, but over five years, IEFA’s more stable progress led to higher cumulative growth and a shallower drawdown. The lower volatility of the IEFA may be important for risk-sensitive investors.
IEFA tracks developed markets outside the US and Canada, offering access to 2,589 holdings, with financial services (22%), industrials (20%) and healthcare (11%) as the top sectors. His most important positions include ASML Holding NV (AMS:ASML.AS), Roche Holding AG (SIX:ROG.SW)and HSBC Holdings Plc (LSE:HSBA.L). With a track record of 13 years, its international focus tends to lean towards companies in Europe and Asia.
Launched on the same day as IEFA, October 18, 2012, IEMG owns 2,707 emerging market stocks, leaning much more toward the technology sector. Its main holdings are Taiwan Semiconductor Manufacturing (2330.SR), Samsung Electronics Ltd (005930.KS)and Tencent Holdings Ltd (0700.HK)giving more exposure to Asian tech giants.
For more guidance on investing in ETFs, check out the full guide at this link.
By comparing these two ETFs, they reveal common patterns in financial markets between emerging and developed markets. In emerging markets, there is usually more volatility with these types of stocks, since they are newer and/or more specialized companies. This leaves more room to grow, but also more room to collapse operationally.
Developed markets, on the other hand, may not experience the price spikes that startups experience, but they are more stable and consistent, and have a stronger foundation to stand on. And when we look at the one-year price difference between the two mentioned ETFs, the emerging markets ETF outperforms. However, in the space of five years, the IEFA’s performance is three times that of the IEMG and has advanced more gradually.