Now, it appears these “emerging markets” are back in fashion, or so they say. Seems investors have got a sudden hankerin’ for places they used to reckon were naught but a risky proposition. Why, not so long ago, folks considered them a good way to lose a fortune faster than a gambler in a saloon. But now? Suddenly, they’re seein’ “value,” “growth,” even a bit of “yield.” It’s enough to make a man wonder if they’ve been swappin’ coffee with a fortune teller.
There’s a passel of these “exchange-traded funds” – fancy names for baskets of stocks – all claimin’ to be the best way to dip your toes into these faraway lands. But pickin’ the right one? That’s like tryin’ to choose the fastest mule in a stampede. One that stands out, though, is the Vanguard FTSE Emerging Markets ETF (VWO 0.02%). It’s got a bit of everything, spread around, and charges a fee so low, it’s practically givin’ the money away. Which, in my experience, is usually a sign of somethin’ clever or somethin’ about to go sideways.
Let’s have a look at these contenders, shall we? See how they stack up, and, more importantly, where they’re tryin’ to pull the wool over your eyes.
Vanguard FTSE Emerging Markets ETF
This here fund holds nigh on two dozen countries and a whopping six thousand stocks. Now, that sounds impressive, but most of it’s piled up in just three places: China, Taiwan, and India. Thirty-two, twenty-three, and twenty percent, if you’re keepin’ score. It’s common enough amongst these funds, mind you. Don’t go thinkin’ it’s a sign of trouble. It’s a reasonable spread, if you don’t mind bein’ heavily reliant on the fortunes of a few empires. And at a mere 0.06% expense ratio, it won’t rob you blind.
Now, here’s a curious thing. Vanguard doesn’t reckon South Korea is an “emerging market.” Some funds do, some don’t. It’s like they can’t agree on what “emerging” even means. This can make a right proper difference, too. You might be gettin’ a full allocation to Korea, or none at all. Fifteen percent, gone like a puff of smoke. It pays to look under the hood, I tell ya.
iShares MSCI Emerging Markets ETF
The iShares MSCI Emerging Markets ETF (EEM +0.43%) does include South Korea, which means everything else gets squeezed a bit. It holds fewer stocks – only 1,200 – which sounds less diversified, but they’re mostly small fry. Their ups and downs ain’t likely to move the needle much. But hold your horses, because this one charges a hefty 0.72% fee. That’s enough to make a man consider investin’ in lottery tickets instead.
iShares Core MSCI Emerging Markets ETF
The iShares Core MSCI Emerging Markets ETF (IEMG +0.43%) follows a slightly different path than its sister fund, but ends up lookin’ mighty similar. It also includes South Korea, naturally. The big difference? An expense ratio of just 0.09%. Now that’s a price a sensible man can appreciate.
State Street SPDR Portfolio Emerging Markets ETF
The State Street SPDR Portfolio Emerging Markets ETF (SPEM 0.06%) boasts the most individual stocks – over 7,200! But from a distance, it looks a lot like the Vanguard fund. It also leaves out South Korea, makin’ it a close cousin. And at 0.07% for expenses, it’s a contender, alright.
Which Emerging Markets ETF is the Winner?
It’s a strange world when pickin’ an emerging market fund comes down to whether you fancy South Korea or not. But that just might be the case.
When it comes to a solid, core investment, low cost usually wins the day. That gives Vanguard the edge, but the difference between these three cheap options is mighty slim. It’s like choosin’ between three nearly identical mules.
If you’re dead set on ownin’ South Korea, the iShares Core MSCI Emerging Markets ETF would be my pick. But if you don’t give a fig, I’d go with the Vanguard FTSE Emerging Markets ETF. It’s a sensible choice, and in this world, sensibility is a rare and precious thing.
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2026-02-17 15:23