EEM vs. VEU

Last updated Jun 25, 2026

EEM (iShares MSCI Emerging Markets ETF) and VEU (Vanguard FTSE All-World ex-US ETF) are both exchange-traded funds - EEM is a Emerging Markets Diversified fund tracking the MSCI Emerging Markets Index (Net), while VEU is a Foreign Large Cap Equities fund tracking the FTSE All-World ex US Index. Both are passively managed. Over the past 10 years, EEM returned 9.88%/yr vs 10.38%/yr for VEU. Their correlation of 0.89 suggests significant overlap in exposure. EEM charges 0.72%/yr vs 0.04%/yr for VEU.

Performance

EEM vs. VEU - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares MSCI Emerging Markets ETF (EEM) and Vanguard FTSE All-World ex-US ETF (VEU). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, EEM achieves a 23.56% return, which is significantly higher than VEU's 12.88% return. Over the past 10 years, EEM has underperformed VEU with an annualized return of 9.88%, while VEU has yielded a comparatively higher 10.38% annualized return.

EEM

• 1D: 0.12%
• 1M: 2.61%
• YTD: 23.56%
• 6M: 24.22%
• 1Y: 43.09%
• 3Y*: 22.63%
• 5Y*: 6.39%
• 10Y*: 9.88%

VEU

• 1D: -0.12%
• 1M: 0.57%
• YTD: 12.88%
• 6M: 12.60%
• 1Y: 27.99%
• 3Y*: 19.21%
• 5Y*: 8.49%
• 10Y*: 10.38%

*Multi-year figures are annualized to reflect compound growth (CAGR)

EEM vs. VEU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
EEM iShares MSCI Emerging Markets ETF	23.56%	33.98%	6.49%	8.95%	-20.56%	-3.63%	17.02%	18.22%	-15.31%	37.26%
VEU Vanguard FTSE All-World ex-US ETF	12.88%	32.35%	5.56%	15.84%	-15.58%	8.27%	11.10%	21.83%	-14.18%	27.40%

Correlation

The correlation between EEM and VEU is 0.89, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.89
Correlation (3Y) Calculated over the trailing 3-year period	0.88
Correlation (5Y) Calculated over the trailing 5-year period	0.89
Correlation (10Y) Calculated over the trailing 10-year period	0.89
Correlation (All Time) Calculated using the full available price history since Mar 8, 2007	0.89

The correlation between EEM and VEU has been stable across timeframes, ranging from 0.88 to 0.89 - a consistent structural relationship.

EEM vs. VEU - Sectors Allocation Comparison

Sectors	EEM	VEU
Technology	46.4%	21.6%
Financial Services	17.8%	22.6%
Consumer Cyclical	7.2%	8.0%
Industrials	5.9%	15.0%
Basic Materials	5.7%	7.1%
Communication Services	5.6%	4.5%
Energy	3.0%	4.7%
Consumer Defensive	2.4%	4.9%
Healthcare	2.3%	6.7%
Utilities	1.8%	3.0%
Real Estate	0.9%	1.9%

Return for Risk

EEM vs. VEU — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

EEM

EEM Risk / Return Rank: 67
EEM Sharpe Ratio Rank: 65
EEM Sortino Ratio Rank: 58
EEM Omega Ratio Rank: 69
EEM Calmar Ratio Rank: 70
EEM Martin Ratio Rank: 70

VEU

VEU Risk / Return Rank: 56
VEU Sharpe Ratio Rank: 56
VEU Sortino Ratio Rank: 54
VEU Omega Ratio Rank: 57
VEU Calmar Ratio Rank: 56
VEU Martin Ratio Rank: 58

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

EEM vs. VEU - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares MSCI Emerging Markets ETF (EEM) and Vanguard FTSE All-World ex-US ETF (VEU). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	EEM	VEU	Difference
Sharpe ratio: Return per unit of total volatility	1.91	1.72	+0.20
Sortino ratio: Return per unit of downside risk	2.47	2.37	+0.11
Omega ratio: Gain probability vs. loss probability	1.37	1.32	+0.05
Calmar ratio: Return relative to maximum drawdown	3.20	2.46	+0.74
Martin ratio: Return relative to average drawdown	11.68	9.40	+2.28

EEM vs. VEU - Sharpe Ratio Comparison

The current EEM Sharpe Ratio is 1.91, which is comparable to the VEU Sharpe Ratio of 1.72. The chart below compares the historical Sharpe Ratios of EEM and VEU, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

EEM vs. VEU - Drawdown Comparison

The maximum EEM drawdown since its inception was -66.43%, which is greater than VEU's maximum drawdown of -61.52%. Use the drawdown chart below to compare losses from any high point for EEM and VEU.

Drawdown Indicators

	EEM	VEU	Difference
Max Drawdown Largest peak-to-trough decline	-66.43%	-61.52%	-4.91%
Max Drawdown (1Y) Largest decline over 1 year	-13.52%	-11.43%	-2.09%
Max Drawdown (3Y) Largest decline over 3 years	-17.29%	-13.69%	-3.60%
Max Drawdown (5Y) Largest decline over 5 years	-37.49%	-29.14%	-8.35%
Max Drawdown (10Y) Largest decline over 10 years	-39.82%	-34.98%	-4.84%
Current Drawdown Current decline from peak	-5.56%	-3.18%	-2.38%
Average Drawdown Average peak-to-trough decline	-15.99%	-13.10%	-2.89%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.70%	2.99%	+0.71%

Volatility

EEM vs. VEU - Volatility Comparison

iShares MSCI Emerging Markets ETF (EEM) has a higher volatility of 12.59% compared to Vanguard FTSE All-World ex-US ETF (VEU) at 7.10%. This indicates that EEM's price experiences larger fluctuations and is considered to be riskier than VEU based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	EEM	VEU	Difference
Volatility (1M) Calculated over the trailing 1-month period	12.59%	7.10%	+5.49%
Volatility (6M) Calculated over the trailing 6-month period	20.71%	14.46%	+6.25%
Volatility (1Y) Calculated over the trailing 1-year period	22.76%	16.43%	+6.33%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.55%	16.29%	+3.26%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.67%	17.08%	+3.59%

EEM vs. VEU - Expense Ratio Comparison

EEM has a 0.72% expense ratio, which is higher than VEU's 0.04% expense ratio.

Dividends

EEM vs. VEU - Dividend Comparison

EEM's dividend yield for the trailing twelve months is around 1.66%, less than VEU's 2.57% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
EEM iShares MSCI Emerging Markets ETF	1.66%	2.22%	2.43%	2.63%	2.50%	1.99%	1.45%	2.76%	2.24%	1.89%	1.89%	2.49%
VEU Vanguard FTSE All-World ex-US ETF	2.57%	3.09%	3.24%	3.32%	3.12%	3.08%	2.00%	3.10%	3.27%	2.66%	2.96%	2.95%

Frequently Asked Questions

Can I hold both EEM and VEU in my portfolio?

EEM and VEU have a correlation of 0.89, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, EEM or VEU?

EEM has higher volatility (12.59%) compared to VEU (7.10%). In terms of maximum drawdown, EEM dropped -66.43% vs VEU's -61.52%.

Which ETF is better, EEM or VEU?

On 10-year performance, VEU leads with 10.38% vs 9.88% for EEM. On fees, VEU is cheaper at 0.04% per year. On volatility, VEU has been the lower-risk option at 7.10%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, EEM or VEU?

Over the 10-year period, VEU has performed better with a 10.38% return vs 9.88%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, EEM or VEU?

VEU is cheaper with a 0.04% expense ratio, compared with 0.72% for EEM.

Which ETF pays a higher dividend yield, EEM or VEU?

VEU has the higher dividend yield at 2.57%, compared with 1.66% for EEM.

What is the main difference between EEM and VEU?

EEM is categorized as Emerging Markets Diversified, while VEU is Foreign Large Cap Equities. EEM tracks MSCI Emerging Markets Index (Net), while VEU tracks FTSE All-World ex US Index. They also come from different issuers: iShares and Vanguard. Their fees differ too: 0.72% for EEM and 0.04% for VEU.

Which has better risk-adjusted returns?

EEM currently has the higher Sharpe Ratio (1.91 vs 1.72), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.