Brendan Coffey, The Motley Fool Thu, November 12, 2026 at 3:12 PM EST 6 min read VWO -1.49% ^GSPC -0.35% Trade VWO on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Comparing the Vanguard FTSE Emerging Markets ETF (NYSEMKT:VWO) against the iShares Core MSCI Total International Stock ETF (NASDAQ:IXUS) highlights a choice between a concentrated bet on developing economies and a broad international market exposure.
Investors often use these instruments to balance a domestic-heavy portfolio by capturing growth outside the United States. While the iShares fund includes exposure to mature markets like Japan, France, and Switzerland, the Vanguard fund specifically targets the higher growth potential -- and the specific geopolitical risks -- inherent in developing economies like China, Brazil, and India.
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 as of the close of trading on Nov. 10, 2026.
Cost-conscious investors will find the Vanguard fund slightly more affordable with its 0.06% expense ratio. However, those prioritizing current income might prefer the iShares fund, which carries a trailing dividend yield 0.87 percentage points higher than its Vanguard peer.
Vanguard FTSE Emerging Markets ETF focuses heavily on technology at 34% and financial services at 20%. The fund manages a massive portfolio of 5,010 holdings, and its largest positions include Taiwan Semiconductor Manufacturing Co Ltd at 15.7%, Tencent Holdings Ltd (SEHK:0700) at 2.8%, and Alibaba Group Holding Ltd (NYSE:BABA) at 2.1%. The fund was launched in 2005. Vanguard FTSE Emerging Markets ETF has paid $1.22 per share over the trailing 12 months, which on its recent ~$56.5 share price works out to a 2.1% yield.
iShares Core MSCI Total International Stock ETF also offers a wide reach with 4,554 holdings that span across both developed and developing markets. This fund leans more into financials at 23% and technology at 20%, offering a different cyclical profile. Its top holdings include Taiwan Semiconductor Manufacturing at 4.3%, Samsung Electronics Ltd at 1.9%, and Asml Holding at 1.5%. It was launched in 2012. iShares Core MSCI Total International Stock ETF has paid $2.80 per share over the trailing 12 months, which, on its recent ~$92.6 share price, works out to a 3% yield.
For more guidance on ETF investing, check out the full guide at this link.
Both of these funds are good options for U.S.-centric investors seeking international exposure in their portfolio. With literally thousands of holdings in their portfolios, these are diverse ETFs that should reflect the state of equities outside the U.S. But here are key differences investors should take into account.
The Vanguard fund, VWO, is primarily an emerging markets ETF, with nearly 61% of its portfolio in emerging markets equities. Theoretically, those should be growing faster over time compared to more developed markets. But that also comes with more risk, or at least volatility for those holding over the long-term.
Digging into the portfolio, VWO is very much an Asia-focused portfolio, with fully 81% of its portfolio in stocks in the region, divided between developed Asia markets, like Singapore, and developing markets, like the Philippines. Latin America is the second most-weighted region, with about 7.5% of assets in the region.
VWO is also a large-cap-leaning fund, with more than 80% of the portfolio in large caps, with a bit of a lean toward growth stocks over value. For a fund holding so many stocks, it is surprisingly heavy in its top 10, with more than a quarter of its assets dedicated to its top 10.
Turning to IXUS, the ETF offers both emerging markets and developed, non-U.S. markets, but it is heavily focused on those developed markets, with more than 80% of the portfolio in developed non-U.S. locales like Europe (the eurozone, emerging Europe, and non-eurozone members including the U.K.) with 38% of assets. Asia, both developed and non-developed, is next, at 37% of the portfolio, plus another 15% in Japanese equities.
IXUS is a large-cap-focused fund, with 79% of assets in large caps, evenly split between growth and value shares. Its top 10 holdings don't get too much attention, befitting such a diverse fund. The top 10 account for 13% of IXUS's assets.
VWO provides investors with decent returns, historically returning 16.7%, 5%, and 6.9% over the 3-year, 5-year, and 10-year lookbacks.
IXUS has rewarded investors with 21.56% annualized returns over the past three years, 8.1% over the past five years, and 9.1% over the preceding 10 years.
Based on performance alone, IXUS is the ETF of choice here for investors seeking international exposure. Its lower maximum drawdown and reasonable expenses are pluses too.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tencent and Vanguard FTSE Emerging Markets ETF. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
VWO vs IXUS: Does Emerging Markets Focus or Broad International Exposure Make for a Better ETF Now? was originally published by The Motley Fool
