The iShares Core MSCI Emerging Markets ETF (IEMG) and iShares Core MSCI EAFE ETF (IEFA) are essential for international diversification, targeting emerging and developed markets outside North America, respectively. IEMG outperformed IEFA over the past year in terms of returns, but IEFA has a higher dividend yield and lower volatility.

IEFA has a lower expense ratio (0.07%) compared to IEMG (0.09%) and a higher dividend yield at 3.32% versus 2.51%. Despite IEMG’s stronger one-year total return, IEFA has shown higher cumulative growth over five years and lower drawdown, making it more stable for risk-sensitive investors.

IEFA focuses on developed markets outside the U.S. and Canada, holding 2,589 stocks with top sectors in financial services, industrials, and healthcare. IEMG, launched on the same day as IEFA, concentrates more on the tech sector with top holdings in Asian tech giants.

When investing in international stocks, remember that emerging markets are more volatile but offer growth potential, while developed markets are stable with consistent returns. Understanding the differences in price movement between U.S. and international assets is crucial for informed investing decisions.

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Read more at Yahoo Finance: Comparing the Emerging and Developed Markets