IEMG vs. EEM - Emerging Market ETFs Compared
IEMG vs. EEM: Key Characteristics
EEM has a higher expense ratio than IEMG
IEMG tracks small, mid, and large-cap stocks
EEM only tracks mid and large-cap stocks
IEMG and EEM aim to provide exposure to equities in emerging markets, but they go about this in different ways.
IEMG tracks the MSCI Emerging Markets Investable Market Index, which includes both large, mid-sized, and small-cap equities from various emerging market countries.
On the other hand, EEM tracks the narrower MSCI Emerging Markets Index, focusing only on large and mid-cap stocks.
IEMG vs. EEM: Expense Ratio Comparison
Expense ratios are one way to measure the cost of owning an ETF, as they represent the percentage of the fund’s total assets that are used for administrative and other operating expenses.
IEMG’s expense ratio is 0.09%, making it a low-cost option in the space.
In comparison, EEM’s expense ratio sits higher, at 0.69%. This could noticeably impact long-term returns, especially for buy-and-hold investors.
IEMG vs. EEM: Dividend Yield Comparison
Both IEMG and EEM offer dividends to their holders. IEMG has a 12-month trailing yield of 2.45%, while EEM boasts a slightly higher yield of 2.65%.
These yields will change over time, but both of these funds are too similar to make it a realistic differentiating factor when picking between the two.
IEMG vs. EEM: Holdings Comparison
The major difference between the two funds is in the number of holdings and market cap allocation. While EEM sticks to large and mid-cap stocks, IEMG extends its reach into the small-cap companies of the market.
IEMG holds nearly 3,000 companies, while EEM holds close to 1,300, making IEMG a bit more diversified. This could also offer more growth opportunities in expanding emerging markets but also comes with a higher risk.
IEMG vs. EEM: Performance Comparison
Speaking generally (as we’re steering clear of hard numbers here), the performance between IEMG and EEM can be influenced by various factors, including market conditions, economic growth in emerging markets, geopolitical factors, and currency fluctuations.
Investors should assess how these factors align with their risk profile and investment strategy.
IEMG vs. EEM: Which is Better For You?
Determining which ETF is better, IEMG or EEM will ultimately depend on your specific needs as an investor.
If you’re looking for a lower expense ratio and exposure to a broader range of equities, IEMG may be the better choice. However, if you prefer sticking to larger, more established companies and aren’t put off by the higher fee, EEM might be more suitable.
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