ASIA vs VGE vs IEM: Asian Tech vs Emerging Markets ETFs

Quick answer: ASIA (BetaShares, 0.67%) is a concentrated bet on 50 Asian tech companies, mostly in Taiwan, South Korea and China. VGE (Vanguard, 0.48%) and IEM (iShares, 0.69%) are broad emerging markets funds, but they differ in one way that has mattered a lot recently. VGE follows FTSE, which classes South Korea as a developed market, so VGE holds no Samsung or SK Hynix. IEM follows MSCI, which still counts Korea as emerging. With Korean memory-chip makers surging, IEM returned 22.3% over the year to September 2026, against VGE's 9.2% to August. ASIA returned 55.9%.

The three funds side by side

	ASIA	VGE	IEM
Issuer	BetaShares	Vanguard	iShares (BlackRock)
What it holds	50 largest Asian tech and internet companies, excluding Japan	~6,300 emerging-market companies, all sizes	800+ large and mid-sized emerging-market companies
Index	Solactive Asia ex-Japan Technology & Internet Tigers	FTSE Emerging Markets All Cap China A Inclusion	MSCI Emerging Markets
Includes South Korea?	Yes (29.2%)	No (FTSE classes it as developed)	Yes
Management fee	0.67%	0.48%	0.69%
Fund size	A$1.29b (15 Oct 2026)	A$2.01b (June qtr 2026)	A$1.83b (30 Sept 2026)
Largest holding	SK Hynix 12.9%	TSMC 16.3%	TSMC 15.5%
Distributions	Half-yearly	Quarterly	Half-yearly

Sources: BetaShares ASIA page; Vanguard ETFs at a glance, June quarter 2026; iShares IEM fact sheet, Sept 2026.

Returns

	1 year	3 years (p.a.)	5 years (p.a.)	As at
ASIA	55.87%	43.90%	18.04%	30 Sept 2026
IEM	22.34%	20.46%	8.94%	30 Sept 2026
VGE	9.18%	12.92%	5.76%	31 Aug 2026

After fees, distributions reinvested. VGE's figures are a month earlier than the others, so the 1-year gap isn't exact; the 3- and 5-year gaps are too large to be explained by that. Past returns don't predict future returns.

3-year return (% p.a.)

ASIA (Asian tech)43.9% p.a.

IEM (MSCI EM)20.46% p.a.

VGE (FTSE EM)12.92% p.a.

VGE vs IEM: the Korea difference

Both are "emerging markets" funds, but the index providers disagree about South Korea. FTSE reclassified South Korea as a developed market in 2009; MSCI still treats it as emerging, saying Korea doesn't yet meet its market accessibility criteria.

So VGE, which tracks a FTSE index, holds no Korean companies. Its top 10 is TSMC, Tencent, Alibaba, MediaTek, Delta Electronics, Hon Hai, HDFC Bank, China Construction Bank, Reliance and ICICI Bank (Vanguard). IEM, on MSCI's index, has Samsung Electronics (7.5%) and SK Hynix (5.9%) as its second- and third-largest holdings (iShares). With memory-chip makers driving much of 2026's gains, that single classification difference explains most of the return gap.

It cuts the other way too. If you already own Korea through a developed-markets fund that follows FTSE, VGE avoids doubling up. But if your global fund follows MSCI, as VGS does (MSCI World ex-Australia), it doesn't include Korea either, so pairing it with VGE leaves you with no Korea exposure at all. Check your global fund's index before choosing.

The other differences:

Fee: VGE is cheaper at 0.48% against 0.69%.
Breadth: VGE holds about 6,300 companies, including small companies and Chinese A-shares. IEM holds the large and mid-sized companies in the MSCI index.
Structure: IEM is Australian-domiciled (converted in 2018, so no W-8BEN form), and holds its portfolio through a single underlying iShares emerging markets fund, according to its fact sheet.

ASIA: a sector bet, not an emerging markets fund

ASIA is often grouped with VGE and IEM, but it's a different kind of fund. It holds the 50 largest technology and internet companies in Asia outside Japan: Taiwan 44.0%, South Korea 29.2%, China 22.6%. Its top 10 at 15 October 2026 was SK Hynix 12.9%, Samsung Electronics 10.3%, TSMC 9.6%, MediaTek 8.2%, Alibaba 7.1% and Tencent 6.8%, with the rest Taiwanese and Korean hardware makers.

That concentration produced the 55.9% one-year return. It also means ASIA rises and falls with the semiconductor cycle and Chinese tech regulation. It holds no banks, energy or consumer companies, which make up much of a broad emerging markets fund. If you also own a semiconductor ETF, there is heavy overlap; see SEMI vs SMHG vs SMH vs SOXX.

Which suits which investor

IEM if you want broad emerging markets including Korea, especially if your global fund is MSCI-based, like VGS, so Korea isn't otherwise covered.
VGE if you want the cheapest, broadest emerging markets fund and either don't want Korea or hold it elsewhere.
ASIA if you specifically want Asian technology and accept a concentrated, volatile sector fund. Most investors would keep it small.

Emerging markets usually make up a modest slice of a diversified portfolio. Our two-ETF portfolio guide shows a typical core. Use the ETF Calculator to test how a 5–10% allocation changes long-run outcomes.

Tax

All three are Australian-domiciled and unhedged. Distributions are mostly foreign income and may carry foreign income tax offsets. Gains on sale use the 50% CGT discount for gains up to 30 June 2027 (units held over 12 months), then indexation with a 30% minimum rate under the 2027 CGT changes. See the Capital Gains Tax Calculator.

Frequently asked questions

What is the difference between VGE and IEM?

Both are broad emerging markets ETFs, but VGE (Vanguard, 0.48% p.a.) follows FTSE, which classifies South Korea as developed, so it holds no Korean companies. IEM (iShares, 0.69% p.a.) follows MSCI, which counts Korea as emerging, so Samsung and SK Hynix are among its largest holdings. That difference drove most of IEM's stronger returns in 2026.

Does VGE hold Samsung?

No. VGE's index provider, FTSE, classifies South Korea as a developed market, so Korean companies such as Samsung and SK Hynix aren't in VGE.

Is the ASIA ETF an emerging markets fund?

Not really. BetaShares ASIA holds only the 50 largest Asian technology and internet companies outside Japan, mainly in Taiwan, South Korea and China. It's a concentrated tech-sector fund, not a broad emerging markets fund.

Which emerging markets ETF is cheapest in Australia?

Vanguard VGE at 0.48% p.a., compared with 0.69% p.a. for iShares IEM. ASIA, a sector fund, charges 0.67% p.a.

Why did the ASIA ETF go up so much?

Its largest holdings are memory and semiconductor makers: SK Hynix, Samsung and TSMC. These rose sharply with demand for AI chips, giving ASIA a 55.9% return in the year to 30 September 2026. A concentrated sector fund can fall just as sharply when that cycle turns.

Related calculators and guides

This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.