VXUS vs. EEM: Seriously?

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Okay, so we’re talking ETFs. Fine. Vanguard’s VXUS and iShares’ EEM. Everyone’s got an opinion. And frankly, it’s exhausting. You’ve got VXUS, trying to be everything to everyone – global diversification, blah, blah, blah. And then you’ve got EEM, laser-focused on emerging markets. Like it’s some kind of specialist. As if that’s better. It’s just… a choice. And why does everything have to be so complicated?

VXUS is the “broad brush” approach. Stocks from everywhere outside the US. Developed, emerging, whatever. It’s like they’re afraid to commit. EEM, on the other hand, says, “No, I’m going all in on emerging markets.” Which is fine, if you like risk. Personally, I prefer things a little less… dramatic. It’s just a matter of temperament, I suppose. Though, honestly, what does “emerging” even mean anymore? It feels… condescending.

Snapshot (the numbers, ugh)

Metric VXUS EEM
Issuer Vanguard iShares
Expense ratio 0.05% 0.72%
1-yr return (as of 2026-02-04) 31.4% 36.2%
Dividend yield 3.0% 2.1%
AUM $606.2 billion $26.95 billion

Look at that expense ratio. 0.72%? Seriously? What are they doing with that money? Building a solid gold ETF headquarters? And yes, EEM had a slightly better one-year return. But at what cost? Emotional distress? Sleepless nights worrying about geopolitical instability? I rest my case. And $606.2 billion in AUM for VXUS? That’s just… excessive. It’s like they’re showing off.

Performance & risk comparison

Metric VXUS EEM
Max drawdown (5 y) (29.43%) (39.82%)
Growth of $1,000 over 5 years $1,277 $1,046

Okay, so EEM has a bigger potential drop. Wonderful. Just what I wanted. A financial rollercoaster. VXUS is, comparatively, the beige sedan of ETFs. Not exciting, but reliable. And over five years, VXUS actually grew more. More! It’s like people are deliberately choosing the less sensible option. It’s baffling.

What’s inside (the holdings, as if anyone cares)

EEM is all about Taiwan Semiconductor, Samsung, and Tencent. Fine. Good companies, I guess. But it feels… concentrated. Like putting all your eggs in a very specific, Asian basket. VXUS, on the other hand, spreads things around. More diversification, less chance of a single company tanking your portfolio. It’s just… common sense.

VXUS has 8,602 holdings! 8,602! Who even knows what they’re all doing? It’s a little unsettling, to be honest. But at least it’s not reliant on the whims of a few tech giants. And they all have these complicated names… ASML Holding? What is that, even?

For more guidance on ETF investing, check out the full guide at this link. (As if that’s going to solve anything.)

What this means for investors (the bottom line, finally)

Look, here’s the deal. VXUS is for people who want a “set it and forget it” international ETF. It’s not going to make you rich overnight, but it’s also not going to keep you up at night. It’s the financial equivalent of a comfortable pair of shoes. EEM is for people who like a little excitement, a little risk, and a slightly higher expense ratio. It’s for people who enjoy chaos. And frankly, I have enough chaos in my life, thank you very much.

EEM might have a better short-term return, but VXUS is the long-term winner. It’s the sensible choice. The rational choice. The… the correct choice. And honestly, isn’t that what we all want? Just a little bit of financial stability in this crazy world? Is that too much to ask?

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2026-02-15 05:02