iShares ETFs ACWX and IEMG Offer Distinct Paths to International Equity Exposure

New York, Jan. 24, 2026 – Two popular exchange-traded funds from iShares give U.S. investors different ways to reach markets outside the United States, and recent data highlight clear contrasts in cost, performance and portfolio structure.

Scope of Each Fund

The iShares Core MSCI Emerging Markets ETF (IEMG) is designed to track emerging-market equities across all market-capitalization segments. The fund’s mandate limits exposure strictly to developing economies, leaving out any stocks from developed countries.

The iShares MSCI ACWI ex US ETF (ACWX) is broader. It tracks large- and mid-cap companies from both developed and emerging markets, but excludes the United States and Canada. As a result, ACWX combines holdings from advanced economies such as Japan, the United Kingdom and France with stakes in high-growth regions like China, India and Brazil.

Cost Structure

Expense ratios diverge sharply. IEMG charges 0.09%, positioning it among the least expensive diversified international funds available. ACWX carries a 0.32% expense ratio. For fee-conscious investors, the three-to-one gap may be decisive, particularly in long-term, buy-and-hold portfolios.

Assets and Liquidity

Asset size further differentiates the pair. IEMG manages $120.1 billion, more than 15 times the $7.9 billion held in ACWX. Larger asset bases can support tighter bid-ask spreads and deeper liquidity, although both funds trade on major U.S. exchanges and generally maintain adequate volume for retail and institutional orders.

Total Return Snapshot

Over the 12-month period ended Jan. 9, 2026, IEMG posted a 36.8% total return, edging out ACWX’s 34.2%. Although the returns are comparable, the annual numbers mask differing long-term patterns. When measuring a hypothetical $1,000 investment over five years, ACWX increased to $1,267, whereas IEMG reached $1,083. The data suggest that ACWX’s developed-market allocation has provided steadier growth during recent cycles.

Risk Metrics

Volatility figures reinforce the distinction. Based on five years of weekly returns, ACWX shows a beta of 1.02, slightly above the S&P 500 benchmark, while IEMG’s 0.96 beta indicates marginally lower sensitivity to broad U.S. equity movements. However, maximum drawdown—a measure of the steepest portfolio decline—reveals that ACWX fell 30.06% in its worst five-year stretch, compared with a 37.16% decline for IEMG. Investors prioritizing downside protection may therefore view ACWX as a modestly less volatile option.

Dividend Characteristics

Both funds distributed a 2.7% dividend yield over the trailing 12 months. While the headline yield is identical, ACWX has historically delivered slightly higher income because its portfolio includes established companies from developed markets, many of which maintain consistent payout policies.

Portfolio Composition

ACWX currently owns 1,751 securities. Financial Services dominate at 25% of assets, followed by Technology and Industrials, each at 15%. The three largest holdings are Taiwan Semiconductor Manufacturing (3.83%), Tencent Holdings (1.48%) and ASML Holding (1.33%). First launched nearly 18 years ago, ACWX offers diversified international exposure with no thematic or factor overlays.

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IEMG holds 2,725 stocks. The sector mix skews toward Technology at 26%, Financial Services at 21% and Consumer Cyclical at 12%. Concentration is higher among top positions: Taiwan Semiconductor Manufacturing accounts for 10.73% of assets, Tencent for 4.14% and Samsung Electronics for 3.70%. The larger weightings reflect both the limited number of mega-cap names in emerging markets and the fund’s full-cap approach, which gives significant influence to the region’s biggest companies.

Investment Horizon Considerations

For investors seeking pure exposure to developing economies, IEMG provides comprehensive coverage at a low cost, capturing potential high-growth stories in Asia, Latin America, Eastern Europe and Africa. The higher concentration in a few technology and internet leaders can amplify both gains and losses, making the ETF suitable for those comfortable with increased volatility.

ACWX appeals to investors who prefer a blended international allocation without U.S. or Canadian equities. By combining developed and emerging markets, the fund may smooth the performance profile, as strength in mature economies can offset weakness in riskier regions. The trade-off is a higher fee and marginally reduced emerging-market upside.

Context Within the Global Index Landscape

The construction methodologies for both funds originate from MSCI. IEMG references the MSCI Emerging Markets Investable Market Index, while ACWX tracks the MSCI ACWI ex USA Index. Differences in index design—particularly market-cap inclusion rules and country classification—explain much of the divergence in sector weights, drawdowns and historical returns.

Key Data Summary

Expense Ratio: 0.09% (IEMG) vs. 0.32% (ACWX)
Assets Under Management: $120.1 billion vs. $7.9 billion
12-Month Total Return: 36.8% vs. 34.2%
Dividend Yield: 2.7% each
Five-Year Max Drawdown: ‑37.16% vs. ‑30.06%
Beta: 0.96 vs. 1.02
Number of Holdings: 2,725 vs. 1,751

Conclusion of Findings

The latest figures underscore a consistent theme: IEMG offers low-cost, high-growth potential through dedicated emerging-market exposure, while ACWX provides a more balanced international allocation with comparatively lower historical volatility. Choice between the two hinges on an investor’s tolerance for risk, desire for cost efficiency and preference regarding developed-market participation.

Crédito da imagem: The Motley Fool