iShares Core MSCI Emerging Markets ETF

IEMG

Market cap $148B

It's smart to diversify your portfolio beyond just U.S. stocks. These ETFs will quickly and easily have you invested in hundreds, if not thousands, of international stocks.

Cinthia Murphy, investment strategist at VettaFi, joined Nate Geraci on this week's ETF Prime to discuss record ETF flows in the first quarter despite challenging market conditions. The industry exceeded $460 billion in total flows, a 50% year-over-year increase from Q1 2025, according to Murphy.

A look at ETF flows for the month of March suggests caution is back in vogue. Fixed income ETFs showed serious muscle in the asset gathering race last month, capturing nearly 45% of net creations.

International stocks have been outperforming U.S. stocks for the past several quarters. The combination of forecast growth, earnings acceleration, and compelling valuations makes a particularly strong investment case for emerging markets.

EEM charges a much higher expense ratio than IEMG for nearly identical sector exposure and performance IEMG holds more than twice as many stocks, covering small-caps that EEM omits EEM is highly liquid but its five-year risk-adjusted return trails IEMG's, and its yield is slightly lower

Introduction When investors choose an emerging markets ETF, the two leading low-cost options are IEMG (iShares Core MSCI Emerging Markets ETF) and VWO (Vanguard FTSE Emerging Markets ETF). At first, they look pretty much interchangeable — both offer broad emerging market equity exposure at scale.

China's tech sector spent three years in the penalty box after Beijing's 2021 regulatory crackdown erased trillions in market value.

As U.S. fund outflows hit a 16-year high and volatility spikes, emerging market ETFs offer a path to diversification and growth.

Almost 1,000 active ETFs launched in 2025, but did their performance substantiate the demand? Across the universe of funds, active managers for ETFs and mutual funds found that outperformance was elusive compared to their passive peers based on the latest Morningstar US Active/Passive Barometer report.

IEMG carries a slightly higher expense ratio and a lower dividend yield than VXUS. IEMG's one-year return outpaced VXUS, but it has experienced a steeper five-year drawdown.