For Some ETFs, Cheaper Really is Better

In recent years, investors have increasingly turned to cheaper options to gain long-term exposure to various market segments. Nevertheless, EEM is still a relevant investment as its vast liquidity and tight bid/ask spreads attract large institutional traders whom care more about executing large bets quickly than the long-term cost of holding the fund.

Related: ETF Managed Portfolios Are Picking Up Pace

IEMG was one of the top asset-gathering ETFs last year. In October, BlackRock lowered IEMG’s annual fee to 0.14% from 0.16% as part of a broader range of expense ratio reductions to the iShares core lineup.

“The iShares MSCI Emerging Markets ETF, ticker EEM, peaked at $53 billion in 2013, but it has been slowly ceding ground to the fund’s in-house rival, which has a lower expense ratio and holds more than twice as many stocks. IEMG’s assets now stand at $32.6 billion, compared with $32.4 billion for EEM,” according to Bloomberg.

VWO is the largest emerging markets ETF trading in the U.S. Like IEMG, VWO charges 0.14% per year.

For more information on the ETF market, visit our ETF performance reports category.