IEMG vs. SPGM: How These Popular Global ETFs Stack Up for Investors

Key Points

The iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) and the State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) both deliver broad equity exposure at a low cost, but they differ in geographic coverage and risk profile.

This comparison explores how their expense ratios, performance, holdings, and sector tilts may appeal to investors looking for either pure emerging markets exposure or a more globally diversified approach.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

Both ETFs are equally affordable with a 0.09% expense ratio, but IEMG offers a substantially higher dividend yield, which may appeal to income-oriented investors.

Performance & risk comparison

What’s inside

IEMG targets large-, mid-, and small-cap equities across emerging markets, with 2,672 holdings. Technology (27%) and financial services (21%) dominate the sector mix, while top positions include Taiwan Semiconductor Manufacturing, Samsung Electronics, and Tencent. The fund’s massive asset base and trading volume support strong liquidity across market cycles, though its narrower focus means higher historical drawdowns.

SPGM, by contrast, blends exposure to both developed and emerging markets, with holdings across technology (26%), financial services (17%), and industrials (12%). Its largest positions — Nvidia, Apple, and Microsoft — anchor the ETF in global blue chips. With nearly 3,000 holdings, SPGM may appeal to those seeking broader diversification beyond just emerging economies.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Investing in international ETFs can be a smart way to diversify your portfolio, and each of these funds offers unique advantages.

IEMG exclusively targets emerging markets, which can be lucrative but also higher risk. Emerging markets ETFs focus on companies in fast-growing economies, offering higher growth potential. However, they’re also more likely to experience volatility due to factors like political or economic instability.

Developed markets can be more stable, but these stocks may not have the same growth potential as those in emerging markets. SPGM offers access to both emerging and developed markets, offering greater diversification to help limit some risk.

IEMG has experienced more significant price fluctuations with a steeper max drawdown. While it’s significantly outperformed SPGM over the last 12 months, it’s fallen short with its five-year total returns. That may be in part due to IEMG’s potential for volatility, or it could be a result of heavy-hitting tech companies like Nvidia experiencing staggering returns in recent years.

If you’re seeking higher growth potential in international companies, IEMG’s emerging markets focus could be a good fit for your portfolio. On the other hand, if you’d prefer a more diversified approach, SPGM’s mix of emerging and markets might be a better option.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.