##  [# South Korea Powers Surge in Emerging Markets ETF Flows](/sections/features/south-korea-powers-surge-emerging-markets-etf-flows) 

 

# South Korea Powers Surge in Emerging Markets ETF Flows

 

 

\- Investors are taking notice of emerging markets ETFs.  
\- South Korea has contributed 3.6 percentage points to IEMG’s nearly 16% return.



 

 

 

 

 [![sumit](/sites/default/files/styles/author_image_icon/public/2023-03/Sumit_0.png?itok=SO-7S5SH "sumit")](/authors/sumit-roy) 

[By Sumit Roy ](/authors/sumit-roy)

 Jul 08, 2025

 Edited by: David Tony

 

 

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This year’s rally in international equities has extended to emerging markets, and ETF investors are taking notice.

The [**iShares Core MSCI Emerging Markets ETF (IEMG)**](/iemg) has pulled in $7.4 billion in inflows year to date, making it the 12th most popular ETF overall and the second most popular international equity ETF after the [**Vanguard Total International Stock Index Fund ETF (VXUS)**](/vxus), which has brought in $7.8 billion.

## IEMG &amp; VWO Gain Investor Attention

IEMG is the largest emerging markets ETF, with $98 billion in assets under management, just ahead of the [**Vanguard Emerging Markets Stock Index Fund ETF (VWO)**](/vwo), which has $92.3 billion and $2.4 billion in 2025 inflows.

Performance-wise, IEMG is up 15.6% so far this year, outpacing VWO’s 12.7% gain but trailing the broader VXUS, which is up 17.5%.

The difference between IEMG and VWO comes down to index construction. IEMG tracks the MSCI Emerging Markets Investable Market Index, which includes large-, mid- and small-cap stocks. VWO, by contrast, tracks the FTSE Emerging Markets All Cap China A Inclusion Index.

One key distinction is the fact that MSCI classifies South Korea as an emerging market, while FTSE classifies it as a developed market. That means South Korea has an 11% weight in IEMG but no presence in VWO.

That difference has been pivotal this year. South Korea has contributed 3.6 percentage points to IEMG’s nearly 16% return, accounting for nearly a quarter of the fund’s gains. Only China, with a 4.3 percentage point contribution, has had a bigger impact.

The [**iShares MSCI South Korea ETF (EWY)**](/ewy) is up 38% year to date, making South Korea one of the best-performing markets in 2025. But the impact of South Korea cuts both ways; last year, EWY dropped more than 20%, dragging on IEMG's performance.

Over longer periods, the differences between IEMG and VWO tend to even out. Over the past five years, both funds are up just under 33%. Over the past decade, IEMG has gained 69.6%, slightly ahead of VWO’s 67.6%.

In short, both ETFs offer low-cost, broad-based exposure to emerging markets. IEMG charges an expense ratio of 0.09%, while VWO edges it out slightly at 0.07%.

 
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 [ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy) 

 

 

  Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including…   [View Bio](/authors/sumit-roy)

 



 

 


 Related Topics  [South Korea](http://www.etf.com/topics/south-korea) 

 [China](http://www.etf.com/topics/china) 

 [Emerging Markets](http://www.etf.com/topics/emerging-markets) 

 [iShares](http://www.etf.com/topics/ishares) 

 [Vanguard](http://www.etf.com/topics/vanguard)