IEMG vs VMBS Fund Comparison

A comparison between IEMG and VMBS based on their expense ratio, growth, holdings and how well they match their benchmark performance.

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Minafi's Take on IEMG vs VMBS

Here's an in depth look at the differences between iShares Core MSCI Emerging Markets ETF ($IEMG) and Vanguard Mortgage-Backed Securities Index Fund ETF Shares ($VMBS).

To start off, here's a look at the basics of each fund. Keep an eye on the FI Score. That's a custom score from 0 to 100 that we generate based on how good this fund is for the casual investor. Most investors only need a handful of total funds in their portfolio. The higher the score, the more likely this is one of those few. Score alone isn't enough! Keep reading on to see how different (or perhaps similar) these two funds are.

85% FI Score
  • iemg
  • ETF
  • International Stocks
  • Emerging Markets

iShares Core MSCI Emerging Markets ETF

Expenses: 0.13% (Better than 1% of similar funds)

This is an OK choice for a Emerging Markets International Stocks fund. See why »

92% FI Score
  • vmbs
  • ETF
  • Bond
  • Government Bond

Vanguard Mortgage-Backed Securities Index Fund ETF Shares

Expenses: 0.05% (Better than 1% of similar funds)

This is a great choice for a Government Bond Bond fund. See why »

Both $IEMG and $VMBS are categorized as ETFs. ETFs have an added bonus over mutual funds of being more widely available. Mutual funds are often limited to only the issuing investment brokerage. Since these are both ETFs, you may be able to find these at a wider number of investment apps and websites.

The biggest disadvantage of ETFs is that some platforms only allow you to purchase ETFs in whole shares. So if an ETF is going for $75, you may need to invest in increments of $75. Most 401(k)'s allow for investing down to the penny, but you'll want to verify your platform allows for "fractional ETF Shares".

To learn more about the difference between these two, you can read about the difference between ETFs and Mutual Funds.

When evaluating a fund, the first things I look at are:

  • What it invests in
  • How much it charges in fees
  • How large the fund is

Let's look into these criteria one by one and see if either of these funds stands out.

Fund Holdings Comparison

Minafi's FI Score algorithm takes into account the category and market. The more niche a fund is, the lower the score. This doesn't mean it's a worse fund, but it does mean you should stop and make sure this a fund you need to diversify your portfolio.

IEMG VMBS
Market Score 9.9 /10 9.4 /10
Category Score 5.0 /10 8.0 /10
Total 14.9 17.4

A score of 10 means this is a solid market and category that almost every investor will want to have investments in. The lower the score, the more specific the investment. These scores are based on when most investors would add these funds to their portfolio. A score of 10 means that this fund (or one like it) belongs in a three-fund portfolio. The lower the score, the farther down in your portfolio a fund would go.

Winner: $VMBS

Fee Comparison

Fees are one of the biggest killers of portfolio growth. The difference between a 2% fee and a 0.04% fee over 30 years can result in your portfolio having half the total value!

If you're just getting started investing and learning how fees impact your portfolio, I'd encourage you to read through my free investment course (specifically '2.2 - All About Fees') where I go over all the different types of fees you can be charged and how to lower them.

For these two funds, IEMG has an expense ratio of 0.13% while VMBS has an expense ratio of 0.05%. In this case, both of these funds have a similar fee.

Winner: $VMBS (barely)

Fund Size Comparison

Both IEMG and VMBS have a similar number of assets under management. IEMG has 46.5 Billion in assets under management, while VMBS has 12.5 Billion.

Minafi categorizes both of these funds as large funds. Fund size is a good indication of how many other investors trust this fund. A large fund by itself doesn't mean it's a good fund, but it is one thing to consider when figuring out how to choose the right fund.

Winner: tie

Which Should You Choose? IEMG or VMBS?

Comparing these two funds isn't an apples to apples comparison. IEMG is a International Stocks Emerging Markets fund, while VMBS is a Bond Government Bond fund.

If you're aiming to build a diversified, low-fee, tax-optimized portfolio you likely won't be choosing between these two funds since they're different enough.

Running both of these funds through Minafi's FI Score algorithm, gives IEMG a score of 85 and VMBS a score of 92.

Winner: $VMBS, Vanguard Mortgage-Backed Securities Index Fund ETF Shares

$IEMG

iShares Core MSCI Emerging Markets ETF

85

Read More
Ratings
Rating Type Rating
Diversification Score 7 /10
Expense Ratio Score 10 /10
Expense Rating 9 /10
Market Score 10 /10
Category Score 5 /10
Overview
Overview Details
Fund Type ETF
Inception Date Oct-18-2012
Exchange NYSE ARCA
Expense Ratio 0.130%
Net Assets 46.5 Billion
Yield 3.77%
Holdings
Description Info
Market International Stocks
Category Emerging Markets
Sectors
  • Basic Materials 7.30%
  • Communication Services 13.12%
  • Consumer Cyclicals 14.75%
  • Consumer Defensive 6.84%
  • Energy 5.69%
  • Financial Services 18.83%
  • Healthcare 4.84%
  • Industrials 5.59%
  • Real Estate 3.33%
  • Technology 17.14%
  • Utilities 2.57%
Regions
  • Africa/Middle East 7.96%
  • Asia Developed 26.46%
  • Asia Emerging 51.36%
  • Europe Developed 0.30%
  • Europe Emerging 4.87%
  • Japan 0.01%
  • Latin America 8.83%
  • North America 0.20%
  • United Kingdom 0.01%

$VMBS

Vanguard Mortgage-Backed Securities Index Fund ETF Shares

92

Read More
Ratings
Rating Type Rating
Expense Ratio Score 9 /10
Expense Rating 10 /10
Market Score 9 /10
Category Score 8 /10
Overview
Overview Details
Fund Type ETF
Inception Date Nov-19-2009
Exchange NASDAQ
Expense Ratio 0.050%
Net Assets 12.5 Billion
Yield 2.52%
Holdings
Description Info
Market Bond
Category Government Bond
Sectors
  • Basic Materials 0.00%
  • Communication Services 0.00%
  • Consumer Cyclicals 0.00%
  • Consumer Defensive 0.00%
  • Energy 0.00%
  • Financial Services 0.00%
  • Healthcare 0.00%
  • Industrials 0.00%
  • Real Estate 0.00%
  • Technology 0.00%
  • Utilities 0.00%

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