## [# IEMG vs. VXUS: Choosing Your International ETF](/sections/features/iemg-vs-vxus-choosing-your-international-etf)
# IEMG vs. VXUS: Choosing Your International ETF
Both funds are attracting billions in 2026.
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[By Sumit Roy ](/authors/sumit-roy)
Feb 13, 2026
Edited by: ETF.com Staff
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International equity ETFs are having a standout year, with roughly $55 billion flowing into the space so far in 2026.
Though investors have piled into dozens of funds, two in particular have dominated the inflows. The [**iShares Core MSCI Emerging Markets ETF (IEMG)**](/iemg) and the [**Vanguard Total International Stock ETF (VXUS)**](/vxus) have attracted $10.2 billion and $8.9 billion year to date, respectively, making them the second- and third-largest recipients of inflows among all U.S.-listed ETFs this year, behind only the [**Vanguard S&P 500 ETF (VOO)**](/voo).
Performance has helped fuel that interest. IEMG is up 11.3% year to date, while VXUS has gained 9%. By contrast, the [**Vanguard Total Stock Market ETF (VTI)**](/vti) is up just 0.4%, and VOO is roughly flat.
The rally comes after international stocks outperformed U.S. equities last year by their widest margin in more than three decades.
## A Shift in Leadership
A major driver of the outperformance has been the drop in the U.S. dollar, which has boosted foreign equity returns for U.S.-based investors. Growth expectations outside the U.S. have also improved.
Meanwhile, U.S. markets, heavily concentrated in technology stocks, have faced headwinds as that sector has stumbled early in 2026. Valuations remain more attractive abroad, with international equities trading at a discount to U.S. stocks on forward earnings.
That backdrop helps explain why investors are revisiting international diversification and why funds like IEMG and VXUS are gathering assets.
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## Broad International vs. Pure Emerging Markets
While both ETFs fall under the international label, they serve different roles.
VXUS tracks the FTSE Global All Cap ex U.S. Index, providing broad exposure to developed and emerging markets outside the United States. The fund manages roughly $140 billion in assets and charges 0.05%. Emerging markets account for about 27% of its portfolio, with the remainder allocated to developed markets.
IEMG tracks the MSCI Emerging Markets Investable Market Index and focuses exclusively on emerging markets. It manages about $144 billion and carries a 0.09% expense ratio.
In short, VXUS functions as a broad international core holding, while IEMG represents more targeted exposure to emerging markets.
## The South Korea Distinction
Much of IEMG’s outperformance this year relative to VXUS can be traced to a difference in index classification.
MSCI classifies South Korea as an emerging market, while FTSE classifies it as developed. Because IEMG tracks an MSCI benchmark, South Korea represents roughly 16% of its portfolio. Strong performance from Korean equities has helped lift the fund’s returns over the past year.
By contrast, the [**Vanguard FTSE Emerging Markets ETF (VWO)**](/vwo), which tracks an FTSE emerging-markets index, does not include South Korea and is up 7.2% year to date, behind IEMG and VXUS.
VXUS, although it tracks a FTSE index, includes South Korea because it spans both developed and emerging markets. However, South Korea accounts for only about 4% of its portfolio, limiting the impact on overall performance.
## Longer-Term Results & Composition
While IEMG has outperformed this year, that hasn’t been the case over longer periods. Over the past five years, VXUS is up 49.3%, compared with 24.4% for IEMG. Over the past ten years, VXUS has returned 170.5%, versus 168.8% for IEMG.
Emerging markets have surged recently, but broad international exposure has performed just as well, if not better, over longer stretches.
IEMG is heavily concentrated in China at 23% of the portfolio, Taiwan at 22%, South Korea at 16%, India at 15%, and Brazil at 5%.
VXUS, by contrast, leans more heavily toward developed markets such as Japan at 15%, the United Kingdom at 9%, Canada at 8%, and France at 5%. Emerging markets still play a role in VXUS, but at smaller weights, with China at 9%, Taiwan at 6%, India at 5%, and South Korea at 4%.
Investors choosing IEMG are making a much more pronounced bet on emerging-market leadership, while VXUS spreads exposure more evenly across both developed and emerging economies.
## Core Holding or Tactical Tilt?
For investors seeking broad diversification outside the U.S., VXUS remains a straightforward core holding that is low cost, highly diversified, and spans thousands of companies across developed and emerging markets.
IEMG offers similarly low fees but delivers a more concentrated bet on emerging markets. Its performance this year shows how that tilt can work when EM lead, but whether that leadership continues is uncertain.
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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 [International](http://www.etf.com/topics/international)
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[Emerging Markets](http://www.etf.com/topics/emerging-markets)