Vanguard FTSE Emerging Markets ETF

VWO

Market cap $116B

As U.S. fund outflows hit a 16-year high and volatility spikes, emerging market ETFs offer a path to diversification and growth.

Emerging market ETFs are back in focus. Two of the ten largest U.S.-listed ETF inflow winners year-to-date are broad EM funds.

Emerging markets are one of the best-performing categories since the beginning of 2025. The Vanguard FTSE Emerging Markets ETF is one of the best options for investing in this space.

Goldman Sachs expects equities in Europe and emerging markets to beat the S&P 500 in the next 10 years. The Vanguard FTSE Europe ETF provides exposure to roughly 1,200 European stocks.

International stocks have been driven by a weaker dollar and positive global economic conditions. European stocks in particular are benefiting from increased defense spending.

There's no stopping the momentum in the ETF market. January 2026 brought a record $166 billion in net inflows, surpassing the last three Januarys combined.

If you hold U.S. large caps, investment grade bonds, and maybe some real estate, you own the parts of the global economy that already get the most attention.

On this episode of the “ETF of the Week” podcast, VettaFi's Head of Research Todd Rosenbluth discussed the Vanguard FTSE Emerging Markets ETF (VWO) with Chuck Jaffe of Money Life. The pair discussed several topics related to the fund to give investors a deeper understanding of the ETF.

We think emerging market (EM) assets can build on a solid start after a strong 2025. We prefer EM hard currency debt and are selective in EM equities.

Choppy S&P 500 moves, AI-driven tech sell-offs and a softer dollar are pushing investors to look beyond U.S. equities, toward global equity ETFs amid volatility.