Which Is the Better International ETF: State Street's Climate-Focused NZAC or iShares' Emerging Markets IEMG?

The State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) offers broad global exposure with climate-risk screens, while the iShares Core MSCI Emerging Markets ETF (NYSEMKT:IEMG) focuses strictly on diverse developing economies.

Investors often choose between broad geographic targets or specific thematic overlays. While IEMG provides low-cost access to thousands of companies across emerging markets, NZAC follows a net-zero strategy across both developed and emerging nations, aiming to mitigate climate-related financial risks for long-term portfolios.

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

The iShares fund is slightly more affordable with an expense ratio of 0.09% compared to 0.12% for the State Street fund. Additionally, the iShares fund offers a higher trailing-12-month dividend yield than the State Street fund.

State Street SPDR MSCI ACWI Climate Paris Aligned ETF focuses on Technology at 35%, Financial Services at 17%, and Healthcare at 9%. Its largest positions include Nvidia (NASDAQ:NVDA) at 9.08%, Apple (NASDAQ:AAPL) at 7.24%, and Microsoft (NASDAQ:MSFT) at 5.56%. The fund maintains 629 holdings and was launched in 2014. State Street SPDR MSCI ACWI Climate Paris Aligned ETF has paid $0.94 per share over the trailing 12 months, which on its recent ~$47 share price works out to a 2.0% yield. It incorporates an ESG screen to align with Paris Agreement goals.

iShares Core MSCI Emerging Markets ETF concentrates on Technology at 39%, Financial Services at 19%, and Consumer Cyclical at 9%. Its top holdings include Taiwan Semiconductor Manufacturing (TWSE:2330) at 13.30%, Samsung Electronics (KOSE:A005930) at 5.86%, and SK Hynix (KOSE:A000660) at 4.69%. The fund holds 2,862 positions and was launched in 2012. iShares Core MSCI Emerging Markets ETF has paid $1.80 per share over the trailing 12 months, which on its recent ~$79 share price works out to a 2.3% yield. It tracks a broad index of large, mid, and small-cap stocks from developing economies.

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These two funds carry international labels but serve very different investor needs, which is the most useful starting point for choosing between them.