Vanguard VEA vs iShares URTH Which ETF Offers Better Value

The Vanguard FTSE Developed Markets ETF (VEA) and the iShares MSCI World ETF (URTH) offer investors exposure to developed markets, but with key differences. VEA excludes U.S. equities, focusing solely on international mature markets, while URTH includes them as part of its global strategy. VEA has a significantly lower expense ratio of 0.03% compared to URTH's 0.24%, making it a more cost-efficient option. Additionally, VEA boasts a higher dividend yield of 2.4%, compared to URTH's 1.4%.

URTH has a heavy concentration in the technology sector at 31%, with top holdings including Nvidia, Apple, and Microsoft. In contrast, VEA is more balanced, with financial services leading at 24%, followed by industrials at 18% and technology at 16%. VEA's top holdings include Samsung Electronics, SK Hynix, and ASML Holding.

VEA was launched in 2007 and has paid $1.70 per share over the trailing 12 months, while URTH, launched in 2012, has paid $2.84 per share over the same period. VEA's higher dividend yield, lower expense ratio, and greater assets under management (AUM) of $323.8 billion compared to URTH's $8.2 billion make it a compelling choice for investors seeking international diversification.

Investors must decide whether to include or exclude the U.S. market in their portfolios. While URTH offers a one-stop global portfolio, VEA is often used to complement existing domestic holdings with international diversification. Given its cost efficiency and higher dividend yield, VEA may be the better buy for those looking to exclude U.S. equities.