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<h2>Key Points</h2><ul><li>EEM’s expense ratio is 10 times higher than IEFA, but it has outpaced IEFA over the past year</li><li>EEM focuses on emerging markets and is heavily tilted toward technology and Asia, while IEFA covers developed markets with a financials and industrials tilt</li><li>IEFA’s yield is higher and its maximum drawdown is smaller, signaling lower risk and more income focus</li><li>10 stocks we like better than iShares - iShares Msci Emerging Markets ETF ›</li></ul><p><strong>iShares Core MSCI EAFE ETF </strong><span class="ticker">(NYSEMKT:IEFA)</span> and <strong>iShares MSCI Emerging Markets ETF</strong> <span class="ticker">(NYSEMKT:EEM)</span> differ sharply in cost, yield, sector exposure, and recent returns, reflecting their distinct focuses on developed versus emerging markets.</p><p>IEFA targets developed markets outside the United States and Canada, providing broad diversification across Europe, Asia, and Australia. EEM, in contrast, invests in large- and mid-cap companies from emerging markets, particularly in Asia and Latin America. This comparison explores how these two global equity ETFs stack up on cost, performance, risk, and portfolio makeup.</p><h2 id="snapshot-cost-amp-size">Snapshot (cost &amp; size)</h2><section><table><tbody><tr><th>Metric</th><th>IEFA</th><th>EEM</th></tr><tr><td>Issuer</td><td>IShares</td><td>IShares</td></tr><tr><td>Expense ratio</td><td>0.07%</td><td>0.72%</td></tr><tr><td>1-yr return (as of 2026-03-24)</td><td>14.5%</td><td>26.2%</td></tr><tr><td>Dividend yield</td><td>3.6%</td><td>2.2%</td></tr><tr><td>Beta</td><td>0.85</td><td>0.64</td></tr><tr><td>AUM</td><td>$166.7 billion</td><td>$25.2 billion</td></tr></tbody></table></section><p><em>Beta measures price volatility relative to the S&amp;P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.</em></p><p>EEM’s expense ratio is substantially higher than IEFA’s, making IEFA far more affordable for long-term holders. IEFA also offers a higher dividend yield, making it more appealing to income-focused investors seeking steady payouts.</p><h2 id="performance-amp-risk-comparison">Performance &amp; risk comparison</h2><section><table><tbody><tr><th>Metric</th><th>IEFA</th><th>EEM</th></tr><tr><td>Max drawdown (five years)</td><td>-30.41%</td><td>-37.82%</td></tr><tr><td>Growth of $1,000 over five years</td><td>$1,235</td><td>$1,089</td></tr></tbody></table></section><h2 id="whatx27s-inside">What's inside</h2><p>EEM tracks large- and mid-cap companies from emerging economies, leaning heavily on technology (34%) and Asian giants. Its top holdings are <strong>Taiwan Semiconductor Manufacturing</strong><span class="ticker">(NYSE:TSM)</span> at 12.51%, <strong>Samsung Electronics Ltd</strong><span class="ticker">(FRA:SSU)</span> at 5.24%, and <strong>Tencent Holdings Ltd</strong><span class="ticker">(OTC:TCEHY)</span> at 3.67%. With 1,223 holdings and a fund age of 23 years, EEM provides deep exposure to emerging-market growth stories but is concentrated in a few tech giants.</p><p>IEFA, meanwhile, covers more than 2,600 companies from developed markets, with a tilt toward financial services (22%) and industrials (21%). Its largest positions include <strong>Asml Holding Nv</strong><span class="ticker">(NASDAQ:ASML)</span>, <strong>Astrazeneca Plc</strong><span class="ticker">(NYSE:AZN)</span>, and <strong>Novartis Ag</strong><span class="ticker">(NYSE:NVS)</span>, each accounting for less than 2.3% of assets. IEFA’s diversification is broader, and its sector mix tends toward stability and income over high-octane growth.</p><p>For more guidance on ETF investing, check out the full guide at this link.</p><h2 id="what-this-means-for-investors">What this means for investors</h2><p>International stocks are an important part of most investment portfolios. Here is how two key international exchange-traded funds (ETFs), iShares Core MSCI EAFE ETF (IEFA) and iShares MSCI Emerging Markets ETF (EEM), match up.</p><p>Let’s start with IEFA. This fund holds 2,600 stocks across many developed markets. Its chief advantage over EEM is its low fees. IEFA has an expense ratio of 0.07%, while EEM has an expense ratio of 0.72%. IEFA also has a higher dividend yield of 3.6%, while EEM has a dividend yield of 2.2%.</p><p>EEM, on the other hand, is an emerging markets ETF. Therefore, it is more oriented to higher-risk growth stocks. EEM has performed well over the last year, recording a return of 26.2%, while IEFA has returned 14.5%.</p><p>In summary, IEFA is better suited to income-oriented investors, those who are more risk-averse, and cost-conscious investors. Meanwhile, more aggressive investors may favor EEM for its potential to deliver outsize returns.</p><h2>Should you buy stock in iShares - iShares Msci Emerging Markets ETF right now?</h2>
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<p style="color: #767676; text-align: left"><em>*Stock Advisor returns as of March 27, 2026. </em></p><p><em>Jake Lerch has positions in Novartis. The Motley Fool has positions in and recommends ASML, AstraZeneca Plc, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool has a disclosure policy.</em></p>
<p>The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.</p>
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<p>The iShares MSCI Emerging Markets ETF (EEM) and iShares Core MSCI EAFE ETF (IEFA) present distinct investment options. EEM, with a higher expense ratio of 0.72% and a 1-year return of 26.2%, focuses on emerging markets, particularly in technology and Asia. In contrast, IEFA, with a lower expense ratio of 0.07% and a 1-year return of 14.5%, targets developed markets and offers a higher dividend yield of 3.6%. While EEM appeals to aggressive investors seeking growth, IEFA is better suited for income-focused and risk-averse investors.</p>

International ETFs: EEM and IEFA Offer Distinct Global ETF Choices