EEM outperforms VWO by 10% YTD due to South Korea's classification difference in indexes.

EEM has outperformed VWO by about 10% year-to-date in 2026, primarily because MSCI classifies South Korea as an emerging market while FTSE classifies it as developed. This means VWO excludes major Korean tech companies like Samsung and SK Hynix, which have surged about 80% this year due to AI-driven memory shortages. This single geographic difference has driven EEM's superior returns, despite VWO's advantages in cost, assets under management, and number of holdings. Investors should consider their existing portfolio exposure to developed markets when choosing between these ETFs.