Vanguard VEA Undercuts iShares EEM With 0.03% Fee as 5-Year Return Reaches $1,607
Updated
Updated · Yahoo Finance · Aug 17
Vanguard VEA Undercuts iShares EEM With 0.03% Fee as 5-Year Return Reaches $1,607
3 articles · Updated · Yahoo Finance · Aug 17
Summary
VEA’s 0.03% expense ratio versus EEM’s 0.72% is the sharpest contrast in the comparison, giving Vanguard’s developed-markets ETF a major cost advantage for long-term international exposure.
That lower fee comes with a 2.5% dividend yield and a stronger five-year growth path—$1,607 from a $1,000 investment versus $1,402 for EEM—while VEA also posted a smaller 29.7% max drawdown against EEM’s 35.0%.
EEM still led on recent momentum, returning 34.4% over the past year versus 28.6% for VEA, reflecting its heavier exposure to higher-growth emerging markets such as China and Taiwan.
The funds differ sharply in construction: VEA holds 3,873 stocks across developed markets including Japan, the UK and Canada, while EEM holds 1,196 names and is more concentrated, with Taiwan Semiconductor alone at 15.14%.
With strategists predicting international markets will beat U.S. stocks, could ultra-low fees make developed market ETFs the ultimate decade-long play?
If top holdings in both funds rely on the same AI boom, does the emerging versus developed label still matter?
Could heavy reliance on a few Asian semiconductor giants expose these supposedly diversified international funds to unexpected catastrophic risks?