BlackRock’s iShares Core MSCI Emerging Markets ETF, ticker IEMG, has outpaced Vanguard’s FTSE Emerging Markets ETF, ticker VWO, by roughly 16 percentage points year-to-date through mid-May 2026. The reason is almost entirely one country: South Korea.
One country, two very different portfolios
MSCI classifies South Korea as an emerging market. FTSE reclassified it as a developed market back in 2009. That single decision explains why the two largest emerging market ETFs in the world are having very different years.
VWO tracks the FTSE index and carries zero exposure to South Korean equities. IEMG tracks MSCI and holds a weighting of more than 12% in Korean names, with Samsung Electronics and SK Hynix sitting near the top of the portfolio.
VWO returned 12% year-to-date and 26% over one year. Samsung and SK Hynix are two of the dominant players in global memory chip production, and demand for that memory, largely driven by AI infrastructure buildouts, has been a defining investment theme of 2025 and 2026. The KOSPI index has ranked among the world’s top-performing major markets in 2026 as a direct result.
