Key Points

iShares Core MSCI Emerging Markets ETF gives investors wide exposure to thousands of companies in emerging economies with a lower expense ratio than the climate-screened State Street fund.
State Street SPDR MSCI ACWI Climate Paris Aligned ETF applies an environmental filter to pursue net-zero goals, whereas the iShares fund follows a standard market-cap weighted index.
iShares Core MSCI Emerging Markets ETF has delivered a higher distribution yield over the past year, though it also saw a larger maximum drawdown.

Investors deciding between State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) and iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) need to balance a climate-focused global approach against comprehensive emerging markets coverage.

Each ETF offers international stock exposure, but their objectives differ sharply. NZAC aims for net-zero emissions by screening global equities for climate risks, while IEMG acts as a cost-effective core holding for those targeting large-, mid-, and small-cap stocks in developing countries.

Snapshot (cost & size)

Metric	NZAC	IEMG
Issuer	SPDR	iShares
Expense ratio	0.12%	0.09%
1-yr return (as of May 6, 2026)	29.00%	52.10%
Dividend yield	1.80%	2.20%
Beta	1.04	.99
AUM	$188.8 million	$155.0 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The iShares ETF stands out as the cheaper choice with its 0.09% expense ratio versus 0.12% for the SPDR ETF. It also provides a stronger trailing-12-month distribution yield of 2.20%.

Performance & risk comparison

Metric	NZAC	IEMG
Max drawdown (5 yr)	(28.30%)	(35.90%)
Growth of $1,000 over 5 years (total return)	$1,591	$1,437

What's inside

iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) tracks 2,661 holdings, emphasizing technology (23%), financial services (18%), and consumer discretionary (9%). Since its 2012 launch, top holdings feature Taiwan Semiconductor Manufacturing at 12.56%, Samsung Electronics at 5.39%, and SK Hynix at 3.87%. The ETF offers a trailing-12-month dividend of $1.85 per share and follows an index of large-, mid-, and small-cap emerging market stocks.

By comparison, State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) follows the MSCI ACWI Climate Paris Aligned Index with 714 holdings selected for ESG and net-zero compatibility. Key sectors include technology (30%) and financials (18%), with leading positions in Nvidia (NASDAQ:NVDA) at 5.88%, Apple (NASDAQ:AAPL) at 4.40%, and Microsoft (NASDAQ:MSFT) at 3.44%. Launched in 2014, it pays a trailing-12-month dividend of $0.82 per share.

What this means for investors

These ETFs cater to distinct investor profiles due to their divergent strategies. NZAC covers global markets across developed and emerging regions, distinguished by its climate focus aligned with the Paris Agreement. It favors firms ready for low-carbon shifts and limits high-emission sectors, creating a diversified worldwide portfolio with built-in sustainability.

IEMG skips any climate filters entirely. It mirrors the complete MSCI Emerging Markets Index, including China, India, Taiwan, and South Korea, to harness growth in developing regions irrespective of environmental impact. This encompasses energy firms, industrial heavyweights, and state enterprises that NZAC avoids.

The cost gap is small, but their investment philosophies diverge greatly. NZAC appeals to those seeking global equities that match environmental priorities. IEMG suits investors betting purely on emerging market expansion without ethical overlays.

Before investing in iShares Core MSCI Emerging Markets ETF, evaluate your portfolio needs and risk tolerance carefully.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.