Two International ETFs With Contrasting Styles: iShares MSCI World ETF (URTH) and Emerging Markets ETF (EEM)
Key Points
iShares MSCI World ETF is significantly more affordable for long-term investors with an expense ratio of 0.24% compared to 0.72% for iShares MSCI Emerging Markets ETF.
iShares MSCI Emerging Markets ETF has delivered higher 1-year total returns but historically experiences greater volatility and deeper maximum drawdowns.
iShares MSCI World ETF provides diversified exposure to developed economies like the U.S. and Europe, while iShares MSCI Emerging Markets ETF focuses on Asian tech giants.
iShares MSCI World ETF (NYSEMKT:URTH) offers lower management costs and a focus on developed-market stability compared to the higher-fee, tech-heavy growth profile of the iShares MSCI Emerging Markets ETF (NYSEMKT:EEM).
Choosing between global exposure and emerging market growth often comes down to risk appetite and cost efficiency. While both the iShares MSCI World ETF and iShares MSCI Emerging Markets ETF offer broad equity exposure, they target different tiers of the global economy, resulting in varying risk profiles.
Snapshot (cost & size)
| Metric | EEM | URTH |
|---|---|---|
| Issuer | iShares | iShares |
| Share price | $68.73 (as of 2026-10-05) | $208.55 (as of 2026-10-05) |
| Expense ratio | 0.72% | 0.24% |
| 1-yr return (as of 2026-10-05) | 29.2% | 15.6% |
| Dividend yield | 1.6% | 1.4% |
| Beta | 0.74 | 0.95 |
| AUM | $31.4B | $8.2B |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The cost difference is a striking feature of this comparison. The iShares MSCI World ETF is significantly more affordable, sporting an expense ratio roughly one-third that of the iShares MSCI Emerging Markets ETF. While the iShares MSCI Emerging Markets ETF offers a slightly higher yield, investors must weigh that against its higher annual management fees.
Performance & risk comparison
| Metric | EEM | URTH |
|---|---|---|
| Max drawdown (5 yr) | (33.8%) | (26.1%) |
| Growth of $1,000 over 5 years (total return) | $1,557 | $1,773 |
What's inside
iShares MSCI World ETF aims to mirror the performance of developed global economies, with a primary focus on the U.S., Europe, and Japan. Its portfolio is led by the Technology sector at 31%, followed by Financial Services at 16% and Industrials at 11%. With 1,252 holdings, the fund is highly diversified, and its largest positions include Nvidia (NASDAQ:NVDA) at 5.91%, Apple (NASDAQ:AAPL) at 5.38%, and Microsoft (NASDAQ:MSFT) at 4.01%. The fund was launched in 2012. iShares MSCI World ETF has paid $2.84 per share over the trailing 12 months, which, on its recent ~$208.6 share price, works out to a 1.4% yield.
iShares MSCI Emerging Markets ETF replicates an index of large and medium-sized companies in developing nations. Its sector allocation leans heavily into Technology at 42%, while Financial Services at 19% and Consumer Cyclical at 8% round out the top three. It holds 1,186 positions, and top holdings include Taiwan Semiconductor Manufacturing at 15.62%, Samsung Electronics at 7.74%, and SK Hynix at 6.09%. The fund was launched in 2003. iShares MSCI Emerging Markets ETF has paid $1.11 per share over the trailing 12 months, which, on its recent ~$68.7 share price, works out to a 1.6% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
When comparing the iShares MSCI World ETF (URTH) and the Emerging Markets ETF (EEM), investors should consider several key factors. Let's see what they tell us about each fund.
First, we should discuss the differing strategies of each fund. It is here that the biggest contrasts become clear. URTH is a fund designed around stocks from around the world, but it is highly concentrated in developed economies, such as the U.S., Japan, and Western Europe. EEM, on the other hand, focuses on emerging economies like India, Taiwan, and China.
Two other important factors are historical performance and income potential. As for historical performance, URTH comes out ahead. Since 2021, the fund has generated a total return of 75%, equating to a compound annual growth rate (CAGR) of 11.9%. EEM, by contrast, has delivered a total return of 46%, with a CAGR of 7.9%. Both funds have underperformed the S&P 500 over this period. Turning to income potential, EEM holds an advantage. Its 1.6% dividend yield is higher than URTH's 1.4%.
One final factor to weigh is cost. URTH has an expense ratio of 0.24%, while EEM's 0.72% is significantly higher. For comparison, someone who invests $10,000 in each fund will pay $24 per year in fees for URTH but $72 per year for EEM.
In summary, although URTH and EEM are both international ETFs, they offer dissimilar profiles. URTH is a world ETF, with many of its top holdings coming from the U.S. Meanwhile, EEM is more narrowly focused on emerging economies. URTH wins the head-to-head matchup on costs and historical performance, while EEM offers the higher yield. Ultimately, many investors will prefer URTH. However, investors seeking to diversify away from U.S.-based stocks may still want to consider EEM.
Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.