Key Points
State Street SPDR Portfolio Developed World ex-US ETF offers a significantly lower expense ratio of 0.03% compared to 0.72% for iShares MSCI Emerging Markets ETF.
iShares MSCI Emerging Markets ETF concentrates heavily on Information Technology and Financials within developing nations like China and Taiwan.
State Street SPDR Portfolio Developed World ex-US ETF has outperformed over the past year and shows a lower maximum drawdown over a five-year horizon.
The State Street SPDR Portfolio Developed World ex-US ETF (NYSEMKT:SPDW) offers ultra-low-cost exposure to mature international markets, while the iShares MSCI Emerging Markets ETF (NYSEMKT:EEM) provides access to higher-growth, higher-volatility developing economies.
International diversification often starts with a choice between mature markets and emerging ones. Investors frequently balance the stability of established global powers against the volatile but potentially rewarding growth of developing nations. This comparison explores how these two heavyweights stack up in terms of cost, regional focus, and risk profiles.
Snapshot (cost & size)
| Metric | EEM | SPDW |
|---|---|---|
| Issuer | iShares | SPDR |
| Share price | $61.11 (as of 2026-11-02) | $49.45 (as of 2026-11-02) |
| Expense ratio | 0.72% | 0.03% |
| 1-yr return (as of Nov. 2, 2026) | 12.7% | 17.3% |
| Dividend yield | 1.8% | 3.1% |
| Beta | 0.77 | 0.86 |
| AUM | $28.3 billion | $41.1 billion |
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 as of the end of the trading day of Nov. 2, 2026.
The State Street fund is significantly more affordable than the iShares fund, with an expense ratio of 0.03% compared to 0.72%. The State Street fund also offers a higher payout, providing a yield of 3.1% versus 1.8% for the iShares fund.
Performance & risk comparison
| Metric | EEM | SPDW |
|---|---|---|
| Max drawdown (5 yr) | (33.2%) | (29.8%) |
| Growth of $1,000 over 5 years (total return) | $1,345 | $1,526 |
What's inside
The State Street SPDR Portfolio Developed World ex-US ETF provides exposure to established economies outside the U.S., with its portfolio concentrated in financial services at 24%, industrials at 17%, and technology at 15%. It holds 2,420 assets, and its largest positions include Sk Hynix (NASDAQ:SKHY) at 1.9%, ASML Holding (NASDAQ:ASML) at 1.85%, and Roche Holding at 1%. The fund was launched in 2007. State Street SPDR Portfolio Developed World ex-US ETF has paid $1.52 per share over the trailing 12 months, which, on its recent ~$49.45 share price, works out to a 3.1% yield.
iShares MSCI Emerging Markets ETF targets information technology (42%), financials (21%), and consumer cyclical--also know as discretionary--at 8%. It holds 1,185 stocks, and its largest positions include Taiwan Semiconductor Manufacturing at 15.8%, Samsung Electronics Ltd at 7%, and SK Hynix at 5.2%. It was launched in 2003. iShares MSCI Emerging Markets ETF has paid $1.11 per share over the trailing 12 months, which on its recent ~$61.11 share price works out to a 1.8% yield.
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Which looks like the better buy?
Properly diversified American investors should be aiming to hold some non-U.S. equities in their portfolios. Each of these ETFs offers exposure to a vast selection of non-U.S. stocks, but they have key differences to take into account.
The State Street fund, SPDW, is heavily concentrated in Europe and Japan, which makes sense given the importance of those economies in the overall world picture. The fund is about 23% allocated in the eurozone, with another 13% in European countries outside the eurozone, which includes the likes of Switzerland and the U.K. Japan comprises nearly 22% of the portfolio. Other large presences in the portfolio include Canada at 11% and Australia at 6% of assets.
Some 80% of the SPDW ETF is in large-cap stocks, roughly equally split between growth and value names. That means the fund owns the biggest names in the economies it is invested in. That doesn't mean it's overweight in its top holdings; just about 12% of the assets are dedicated ot its top 10 holdings.
EEM, the international ETF from iShares, is about 51% in developed markets outside the U.S., with 48% of its assets invested in emerging markets. Emerging markets theoretically should offer better long-term returns than developed markets, though at greater risk, according to some investing theories.
Fully 82% of EEM's portfolio is in Asia stocks, divided up with 48% to developed Asian economies like Singapore (there is no Japanese exposure), and the balance in emerging Asian economies such as the Philippines. Taiwan, at 28% of assets, is the largest single country it is invested in, followed by mainland China, at 20% and South Korea at 19%, followed by India at 12%.
The portfolio is 93% in large caps, so EEM owns the largest stocks in the various countries it is exposed to. The mix is more skewed toward growth, which should bring better returns but more volatility.
So which international ETF is the right choice? If all other considerations are equal for your portfolio, then go with long-term performance.
SPDW has returned an annualized 22%, 9%, and 10% over the 3-year, 5-year, and 10-year time frames, respectively.
EEM has rewarded investors with annualized returns of 21%, 6%, and 7% over the past three-, five-, and 10-year periods.
Based on historical performance, SPDW is the choice. Its low maximum drawdown, higher dividend yield, and lower expense ratio are also fine reasons for choosing the State Street ETF.
Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML. The Motley Fool has a disclosure policy.