From what I have read, early tracking funds were disappointing in their ability to track. Cointegration and management are needed to find and maintain a portfolio which actually tracks. If your goal is simply to buy-and-hold a basket of overseas stocks, then perhaps looking into creating overseas accounts. I don't know the costs involved, but I know of some groups that do such things. There can be asset protection benefits and currency devaluation hedging. ETFs are supposed to differ from mutual funds by being super-low fees and liquid. Are you sure that the liquid part doesn't matter to you?
shortbleu, You're probably underestimating the cost of holding individual securities. There are additional fees associated with holding ADR's. Buying and holding stock on their home exchanges may also incur additional costs. It will certainly involve higher transaction costs. While your investment strategy may be passive, you would have to actively monitor for any corporate actions taking place and decide whether or not to participate (more transaction costs). There would also be a large amount of paperwork to go through every year. EEM currently has holdings in 764 stocks. ie there average exposure to a single security is 0.13%. There largest single exposure (Samsung) is 2.47%. A 30 stock portfolio will necessarily be riskier. You will likely either outperform or underperform by margins much greater than 0.7% If you don't believe you can beat the market through active stock selection, I would buy the ETF.