Which International ETF is the Better Buy: VEA or EEM?
Vanguard's fund charges just 0.03% annually versus iShares' 0.72%, and has delivered stronger five-year returns with less volatility.
The Vanguard FTSE Developed Markets ETF (VEA) and the iShares MSCI Emerging Markets ETF (EEM) are two popular international equity funds that cater to investors seeking global exposure. VEA focuses on mature economies like Japan, the U.K., and Canada, offering potentially steadier returns compared to EEM, which targets developing nations like China and Taiwan, known for higher growth but also greater volatility.
Beta, a measure of price volatility relative to the S&P 500, is calculated using monthly returns over the fund's history, up to five years. The 1-year return represents the total return over the past year. Additionally, dividend yield refers to the trailing-12-month distribution yield.
Investors must weigh the trade-offs between these two ETFs based on their risk tolerance and investment objectives. VEA's lower volatility and focus on established markets might appeal to those seeking stability, while EEM's higher growth potential could attract those willing to accept greater risk for potentially greater rewards.
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