Vanguard Emerging Markets Stock ETFVWO

Morningstar Rating

ETF Research and Analysis

by Bradley Kay
Suitability

Vanguard Emerging Markets Stock ETF VWO provides comprehensive exposure to the emerging-markets large-cap universe and is appropriate as a smaller core holding to complement foreign developed-markets equities. This asset class contains heavily concentrated industry bets that should be understood before investing.  Read more 

Bull Case

Emerging-markets stocks are a solid diversifier for a portfolio of developed-markets equities as they sport substantial commodities price exposure and relatively low returns correlations.
With foreign-currency reserves at record highs and domestic consumption growing, emerging economies look well positioned to weather a global downturn.
This fund is the cheapest emerging-markets ETF by far, which makes it the superior choice for most investors' emerging-markets exposure. Read more 

Bear Case

Emerging-markets equities are very volatile, with standard deviations about 50% to 60% higher than U.S. and developed-market equities.
Many of the large-cap companies that dominate the MSCI Emerging Markets Index sell in competitive global markets, giving them less exposure to the emerging economies than investors might first expect.
Although this ETF has attracted billions in assets, its average daily dollar volume remains around $150 million. Those looking to frequently trade huge sums may prefer iShares MSCI Emerging Markets. Read more 

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