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IWM vs. EEM
Performance
Return for Risk
Drawdowns
Volatility
Dividends

IWM vs. EEM

Last updated Jun 13, 2026

IWM (iShares Russell 2000 ETF) and EEM (iShares MSCI Emerging Markets ETF) are both exchange-traded funds - IWM is a Small Cap Blend Equities fund tracking the Russell 2000 Index, while EEM is a Emerging Markets Diversified fund tracking the MSCI Emerging Markets Index (Net). Both are passively managed. Over the past 10 years, IWM returned 11.27%/yr vs 9.91%/yr for EEM. A 0.69 correlation means they provide meaningful diversification when combined. IWM charges 0.19%/yr vs 0.72%/yr for EEM.

Performance

IWM vs. EEM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Russell 2000 ETF (IWM) and iShares MSCI Emerging Markets ETF (EEM). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, IWM achieves a 19.22% return, which is significantly lower than EEM's 24.07% return. Over the past 10 years, IWM has outperformed EEM with an annualized return of 11.27%, while EEM has yielded a comparatively lower 9.91% annualized return.

IWM

1D
0.87%
1M
3.64%
YTD
19.22%
6M
16.00%
1Y
39.16%
3Y*
17.23%
5Y*
6.07%
10Y*
11.27%

EEM

1D
0.56%
1M
1.00%
YTD
24.07%
6M
26.94%
1Y
45.22%
3Y*
21.60%
5Y*
6.56%
10Y*
9.91%
*Multi-year figures are annualized to reflect compound growth (CAGR)

IWM vs. EEM - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
IWM
iShares Russell 2000 ETF		19.22%12.66%11.38%16.83%-20.48%14.54%20.03%25.39%-11.12%14.58%
EEM
iShares MSCI Emerging Markets ETF		24.07%33.98%6.49%8.95%-20.56%-3.63%17.02%18.22%-15.31%37.26%

Correlation

The correlation between IWM and EEM is 0.66, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.66

Correlation (3Y)
Calculated over the trailing 3-year period

0.61

Correlation (5Y)
Calculated over the trailing 5-year period

0.63

Correlation (10Y)
Calculated over the trailing 10-year period

0.61

Correlation (All Time)
Calculated using the full available price history since Apr 14, 2003

0.69

The correlation between IWM and EEM has been stable across timeframes, ranging from 0.61 to 0.69 - a consistent structural relationship.

IWM vs. EEM - Sectors Allocation Comparison

Sectors
IWM
EEM

Technology

19.5%
43.6%

Industrials

17.2%
6.2%

Healthcare

16.1%
2.5%

Financial Services

15.6%
17.5%

Consumer Cyclical

7.9%
8.1%

Energy

5.8%
3.3%

Real Estate

5.6%
0.9%

Basic Materials

4.5%
6.1%

Utilities

3.0%
2.0%

Consumer Defensive

2.1%
2.7%

Communication Services

2.1%
5.7%

Technology

IWM
19.5%
EEM
43.6%

Industrials

IWM
17.2%
EEM
6.2%

Healthcare

IWM
16.1%
EEM
2.5%

Financial Services

IWM
15.6%
EEM
17.5%

Consumer Cyclical

IWM
7.9%
EEM
8.1%

Energy

IWM
5.8%
EEM
3.3%

Real Estate

IWM
5.6%
EEM
0.9%

Basic Materials

IWM
4.5%
EEM
6.1%

Utilities

IWM
3.0%
EEM
2.0%

Consumer Defensive

IWM
2.1%
EEM
2.7%

Communication Services

IWM
2.1%
EEM
5.7%

Compare stocks, funds, or ETFs

Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.

iShares Russell 2000 ETF

iShares MSCI Emerging Markets ETF

Often compared with IWM:
IWM vs. SPYIWM vs. VTWOIWM vs. IJRIWM vs. AVUVIWM vs. IWNIWM vs. VOOIWM vs. TNA
Often compared with EEM:
EEM vs. VWOEEM vs. SPYEEM vs. IEMGEEM vs. IS3N.DEEEM vs. VXUSEEM vs. EEMSEEM vs. SPEM

Return for Risk

IWM vs. EEM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
IWM
IWM Risk / Return Rank: 7272
Overall Rank
IWM Sharpe Ratio Rank: 7171
Sharpe Ratio Rank
IWM Sortino Ratio Rank: 7171
Sortino Ratio Rank
IWM Omega Ratio Rank: 6363
Omega Ratio Rank
IWM Calmar Ratio Rank: 7979
Calmar Ratio Rank
IWM Martin Ratio Rank: 7676
Martin Ratio Rank
EEM
EEM Risk / Return Rank: 7575
Overall Rank
EEM Sharpe Ratio Rank: 7676
Sharpe Ratio Rank
EEM Sortino Ratio Rank: 7070
Sortino Ratio Rank
EEM Omega Ratio Rank: 7878
Omega Ratio Rank
EEM Calmar Ratio Rank: 7575
Calmar Ratio Rank
EEM Martin Ratio Rank: 7575
Martin Ratio Rank
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.

IWM vs. EEM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Russell 2000 ETF (IWM) and iShares MSCI Emerging Markets ETF (EEM). 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.

IWMEEMDifference
Sharpe ratioReturn per unit of total volatility
1.99
2.10

-0.10

Sortino ratioReturn per unit of downside risk
2.75
2.73

+0.02

Omega ratioGain probability vs. loss probability

1.33

1.40

-0.07

Calmar ratioReturn relative to maximum drawdown

3.57

3.36

+0.21

Martin ratioReturn relative to average drawdown

12.63

12.38

+0.24

IWM vs. EEM - Sharpe Ratio Comparison

The current IWM Sharpe Ratio is 1.99, which is comparable to the EEM Sharpe Ratio of 2.10. The chart below compares the historical Sharpe Ratios of IWM and EEM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Drawdowns

IWM vs. EEM - Drawdown Comparison

The maximum IWM drawdown since its inception was -59.05%, smaller than the maximum EEM drawdown of -66.43%. Use the drawdown chart below to compare losses from any high point for IWM and EEM.

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Drawdown Indicators

IWMEEMDifference

Max Drawdown

Largest peak-to-trough decline

-59.05%

-66.43%

+7.38%

Max Drawdown (1Y)

Largest decline over 1 year

-11.03%

-13.52%

+2.49%

Max Drawdown (3Y)

Largest decline over 3 years

-27.50%

-17.29%

-10.21%

Max Drawdown (5Y)

Largest decline over 5 years

-31.91%

-37.49%

+5.58%

Max Drawdown (10Y)

Largest decline over 10 years

-41.13%

-39.82%

-1.31%

Current Drawdown

Current decline from peak

0.00%

-4.12%

+4.12%

Average Drawdown

Average peak-to-trough decline

-10.76%

-16.00%

+5.24%

Ulcer Index

Depth and duration of drawdowns from previous peaks

3.12%

3.67%

-0.55%

Volatility

IWM vs. EEM - Volatility Comparison

The current volatility for iShares Russell 2000 ETF (IWM) is 7.16%, while iShares MSCI Emerging Markets ETF (EEM) has a volatility of 10.80%. This indicates that IWM experiences smaller price fluctuations and is considered to be less risky than EEM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

IWMEEMDifference

Volatility (1M)

Calculated over the trailing 1-month period

7.16%

10.80%

-3.64%

Volatility (6M)

Calculated over the trailing 6-month period

14.29%

19.39%

-5.10%

Volatility (1Y)

Calculated over the trailing 1-year period

19.73%

21.64%

-1.91%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

22.61%

19.26%

+3.35%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

23.08%

20.64%

+2.44%

IWM vs. EEM - Expense Ratio Comparison

IWM has a 0.19% expense ratio, which is lower than EEM's 0.72% expense ratio.

Dividends

IWM vs. EEM - Dividend Comparison

IWM's dividend yield for the trailing twelve months is around 0.87%, less than EEM's 1.79% yield.

PositionTTM20252024202320222021202020192018201720162015
EEM
iShares MSCI Emerging Markets ETF		1.79%2.22%2.43%2.63%2.50%1.99%1.45%2.76%2.24%1.89%1.89%2.49%
IWM
iShares Russell 2000 ETF		0.87%1.04%1.15%1.35%1.48%0.94%1.04%1.26%1.40%1.26%1.38%1.54%

Frequently Asked Questions

IWM and EEM have a correlation of 0.66, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

EEM has higher volatility (10.80%) compared to IWM (7.16%). In terms of maximum drawdown, IWM dropped -59.05% vs EEM's -66.43%.

On 10-year performance, IWM leads with 11.27% vs 9.91% for EEM. On fees, IWM is cheaper at 0.19% per year. On volatility, IWM has been the lower-risk option at 7.16%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, IWM has performed better with a 11.27% return vs 9.91%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

IWM is cheaper with a 0.19% expense ratio, compared with 0.72% for EEM.

EEM has the higher dividend yield at 1.79%, compared with 0.87% for IWM.

IWM is categorized as Small Cap Blend Equities, while EEM is Emerging Markets Diversified. IWM tracks Russell 2000 Index, while EEM tracks MSCI Emerging Markets Index (Net). Their fees differ too: 0.19% for IWM and 0.72% for EEM.

EEM currently has the higher Sharpe Ratio (2.10 vs 1.99), 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.

Portfolio Optimizer

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