EMDM vs VEXC

EMDMDFirst Trust Bloomberg Emerging Market Democracies ETF

VEXCAVanguard Emerging Markets Ex-China ETF

In short

EMDM Most emerging-market funds sort companies by size. EMDM screens countries first: only markets clearing an electoral-democracy bar are eligible, and roughly 110 large and mid caps come from the survivors.

VEXC Vanguard's emerging markets, China removed. Same index-tracking discipline, 0.07% a year, a fraction of what the typical EM fund charges. Ex-China is no longer a niche idea; this is the cheap way to own it.

Stated mandate

EMDM The Fund seeks to track, before fees and expenses, the price and yield performance of the Bloomberg Emerging Market Democracies Index. It normally invests at least 80% of net assets in securities comprising that Index and uses a replication strategy.

VEXC The fund invests in emerging-market stocks while excluding China and seeks to closely track the FTSE Emerging ex China Index.

Why people hold it

• EMDM The filter runs at the country level, before any stock selection. Markets that fail the electoral-democracy test are out, so the country map looks nothing like a standard EM index.ftportfolios.com
• Ordinary plumbing under the theme: a 1940 Act ETF that replicates its Bloomberg index with at least 80% of net assets, holds roughly 110 stocks, and pays quarterly.
• The politics are outsourced to a published rulebook, not to a manager's read of the headlines. First Trust has tracked the index since the 2023 launch.

• VEXC Charges 0.07% a year against a 0.49% median for emerging-markets funds, and undercuts the other top-graded names in the group, including XCEM at 0.16% and BKEM at 0.11%.
• Rules-based, not opinion-based: it tracks the FTSE Emerging ex China Index, so the China carve-out is written into the mandate rather than left to a manager's discretion.vanguard.com
• Splitting China out of emerging markets puts the sizing decision in your hands instead of accepting whatever weight a broad EM index assigns. Pays quarterly.vanguard.com
• Ranks among the strongest implementations in its emerging-markets peer group on the things we measure: cost, mandate clarity, index discipline.

Worth knowing

• EMDM Cost is the sticking point: 0.75% a year, versus a 0.49% median across its emerging-market peer group and single-digit basis points at VEXC (0.07%) or XCEM (0.16%).
• A small, thinly traded fund. Spreads can run wider than in the giant EM trackers, so the order type you use matters more here.
• Screening out non-democracies removes several of the largest markets in the EM universe, so results can diverge widely from a standard emerging-market benchmark in either direction.ftportfolios.com

• VEXC Launched in 2025 and still thinly traded, so it lacks the trading heft of the giant EM funds. Spreads can be wider than the Vanguard name suggests.
• Excluding an entire country by rule means results will drift away from broad EM funds, in both directions, depending on how China does.
• The remaining basket screens more concentrated than most funds in the category, so a handful of countries and sectors drive much of the outcome.

Full EMDM profile⁠

Full VEXC profile⁠