Better International ETF: Vanguard's VXUS vs. iShares' EEM
The Motley Fool
by newsfeedback@fool.com (Robert Izquierdo)February 15, 2026
AI-Generated Deep Dive Summary
The Vanguard Total International Stock ETF (VXUS) and iShares MSCI Emerging Markets ETF (EEM) offer distinct approaches to international investing, catering to different investor needs. While VXUS provides broad exposure to both developed and emerging markets outside the U.S., EEM focuses exclusively on large- and mid-cap stocks from emerging economies. This comparison highlights key differences in expense ratios, diversification, and risk levels, helping investors determine which ETF aligns better with their financial goals.
VXUS is known for its low expense ratio and comprehensive global coverage, making it a strong choice for those seeking balanced international exposure. It includes developed markets like Europe and Japan, as well as emerging economies such as China and India. On the other hand, EEM offers higher concentration in emerging markets, which can be appealing for investors looking to capitalize on growth opportunities but are willing to take on more volatility. Its narrower focus allows for deeper exposure to high-growth regions, though it excludes developed markets.
Understanding the beta levels is crucial when choosing between these ETFs. VXUS has a moderate beta relative to the S&P 500, indicating lower volatility compared to EEM, which tends to be more volatile due to its emphasis on emerging markets. Additionally, VXUS boasts a higher 1-year return history, reflecting its diversified approach and stability during market fluctuations. EEM, while potentially offering higher returns in bull markets, carries greater risk and is better suited for investors with a tolerance for volatility.
For readers interested in finance and investing, this comparison underscores the importance of aligning ETF choices with personal investment strategies. Whether prioritizing broad diversification or focusing on high-growth emerging markets, each ETF serves a unique purpose. Investors should consider their risk tolerance, desired market exposure, and long-term goals when making informed decisions about their portfolios.
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Originally published on The Motley Fool on 2/15/2026