Vanguard FTSE Emerging Markets ETF

VWO

Market cap $101B

In this piece, we'll have a closer look at three of the most popular Vanguard ETFs out there.

Investors can eye global equity funds as AI bubble fears, U.S. market risks and Fed easing fuel demand for international diversification.

September is a wrap, and it was a good one for the market. All major asset classes posted gains during the month.

Getting emerging market exposure is a viable option in the current market environment. That's especially so given the global de-dollarization and prospect of further rate cuts by the Federal Reserve.

The artificial intelligence sector is showing critical warning signs that suggest a significant correction may be approaching. Recent market analysis reveals that AI stocks, particularly the “Magnificent Seven,” have been making lower highs since December 2024, diverging from broader market performance – a pattern that historically precedes major corrections.

There are 17 ETFs that had more than $100 billion in assets as of September 4, with two others approaching this milestone. The two funds are the Vanguard FTSE Emerging Markets ETF (VWO) and the Vanguard Dividend Appreciation ETF (VIG).

Amid AI bubble worries and tech sell-offs, investors turn to value, consumer staples, gold and international ETFs for diversification.

When it comes to equities exposure, U.S. large-caps continue to garner the lion's share of capital allocations. However, emerging markets (EM) could finally be in the throes of a comeback.

Global equities ex-US were already leading US stocks in 2025 by a wide margin ahead of the trade deal announced this week between the US and Japan. Vanguard International Stock ETF rose sharply yesterday, and is now up 21.8% year to date.

VEE:CA offers Canadian investors hedged access to emerging markets, primarily via VWO, with currency risk mitigation and fewer tax complications than U.S. ETFs. Emerging markets have outperformed YTD, but ongoing U.S.-China tariff tensions create uncertainty and potential margin pressure for Chinese exporters. Despite short-term risks, I believe global trade realignment away from U.S. dominance will benefit emerging markets and VEE:CA over the long term.