Better Emerging Markets ETF: Vanguard's VWO vs. iShares' EEM

• VWO charges a fraction of EEM’s disbursal ratio and sports a higher dividend yield.

• EEM has delivered a stronger one-year instrumentality but saw a deeper five-year drawdown than VWO.

• VWO holds much stocks and is dramatically larger, but some funds are anchored by Taiwan Semiconductor and Tencent.

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iShares MSCI Emerging Markets ETF (NYSEMKT:EEM) is costlier and much volatile, portion Vanguard FTSE Emerging Markets ETF (NYSEMKT:VWO) offers broader holdings, a overmuch little fee, and a somewhat higher output — but lags EEM successful caller full return.

Both EEM and VWO people large- and mid-cap stocks from emerging markets, with dense vulnerability to Asia and large names similar Taiwan Semiconductor Manufacturing (NYSE:TSM) and Tencent Holdings (OTC:TCEHY). This examination unpacks cardinal differences successful cost, performance, risk, and portfolio constitution to assistance semipermanent investors measurement which emerging markets ETF whitethorn entreaty to their needs.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

VWO is overmuch much affordable than EEM, with an disbursal ratio that is 65 percent points lower, and it besides pays a modestly higher dividend output astatine 2.8% versus EEM’s 2.2%.

VWO tracks implicit 2,000 stocks crossed emerging markets, with exertion (23%), fiscal services (21%), and user cyclical (13%) arsenic apical sectors. Its largest positions are Taiwan Semiconductor Manufacturing, Tencent Holdings, and Alibaba Group Holding (NYSE:BABA), and the fund’s 20.8-year way grounds makes it 1 of the oldest successful the space. No leverage, currency hedge, oregon ESG overlays are present.

EEM is simply a spot much concentrated, holding 1,215 stocks with akin assemblage tilts: exertion (27%), fiscal services (22%), and user cyclical (12%). Its portfolio is anchored by Taiwan Semiconductor Manufacturing, Tencent Holdings, and Samsung Electronics (OTC:SSNL.F), truthful the apical holdings and assemblage exposures are intimately aligned with VWO. Neither money includes notable structural quirks.

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The iShares MSCI Emerging Markets ETF (EEM) and Vanguard FTSE Emerging Markets ETF (VWO) connection akin vulnerability to emerging markets, considering the similarity successful assemblage weighting and that their apical 2 stocks are identical. However, show volition disagree owed to the differences successful wide holdings.