VWO vs EEM: The Emerging Markets Cost War — 0.08% vs 0.68%
VWO and EEM both invest in emerging market stocks. The performance is similar. The fee difference is enormous. For long-term investors, VWO is the clear choice.
VWO (Vanguard FTSE Emerging Markets ETF) and EEM (iShares MSCI Emerging Markets ETF) both invest in developing economies — China, India, Taiwan, Brazil, South Korea, and others. VWO charges 0.08%; EEM charges 0.68%. That 60 basis point gap is massive by modern ETF standards. On a $100K emerging markets allocation over 20 years, you'd pay roughly $15,000 more in fees with EEM than VWO. EEM's only advantages: much higher options market liquidity (it's the dominant EM options vehicle) and inclusion in Korea (VWO excludes South Korea, classifying it as a developed market). For options traders or Korea-specific needs, EEM has a niche role. For everyone else, VWO or IEMG (iShares at 0.09%) are clearly better.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
Both funds trade commission-free at every major brokerage. How the major brokerages compare →
📋 VWO vs EEM: Key Facts Side by Side
| Metric | VWO | EEM |
|---|---|---|
| Fund Name | Vanguard FTSE Emerging Markets Index Fund ETF Shares | iShares MSCI Emerging Markets ETF |
| Issuer | Vanguard | iShares |
| Tracks Index | FTSE Emerging Markets All Cap China A Inclusion | MSCI Emerging Markets |
| Expense Ratio | 0.08% ✓ | 0.68% |
| Cost per $10K/yr | $8.00 | $68.00 |
| AUM | $162.0B | $29.2B |
| Holdings | 5,800 | 1,200 |
| Inception | 2005 | 2003 |
| 1-Year Return | +18.40% | +35.60% |
| 3-Year Return | +18.18% | +22.86% |
| 5-Year Return | +6.89% | +8.21% |
| Dividend Yield | 2.36% | 1.73% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.01% | 0.01% |
Expense ratio, AUM, and returns updated Aug 30, 2026 from ETF BFF database. Returns are annualised. Not investment advice.
📊 VWO vs EEM: Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want the lowest fees: saves ~$60/yr per $10K vs EEM
- want broader diversification (5,800 holdings vs 1,200)
- already use iShares and prefer staying within one fund family
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
⚙️ Want the Full Interactive Comparison?
Side-by-side holdings overlap, sector breakdown, and live performance tabs, all in one place.
Run Full VWO vs EEM Comparison → Free · No signup · Instant resultsGlobal ETF investing made simple, one concept a week
Currency risk, hedged vs unhedged, emerging vs developed, demystified in plain English.
Reviewed by a CFA® charterholder · No spam · Unsubscribe anytime
❓ VWO vs EEM: Frequently Asked Questions
New to ETF investing? See answers to the most common ETF questions →