Vanguard FTSE Emerging Markets ETF

VWO

Market cap $110B

VWO is a passive ETF, in my opinion an intelligent proxy of the emerging market (China included). Even today it has attractive valuations compared to developed markets, with a P/E of 16x thanks to an estimated EPS growth rate of about 16.5%. But valuations might not be enough, VWO could find itself trapped by post–Trump intervention macro dynamics in Venezuela and beyond.

Emerging markets climbed over 25% in 2025 while trading at deep discounts to U.S.

The average expense ratio for passively managed exchange-traded funds is 0.14%, and for actively managed ETFs, it's 0.44%, according to Morningstar Direct. While low fees are important because the cost of your investment eats into gains, there are some other aspects of ETFs to consider.

VWO charges a fraction of EEM's expense ratio and sports a higher dividend yield. EEM has delivered a stronger one-year return but saw a deeper five-year drawdown than VWO.

Emerging markets stocks roared back to life in 2025, putting this Vanguard ETF in the spotlight. It's an effective tool for investors looking for exposure to a slew of stocks hailing from developing economies.

IEMG charges a slightly higher expense ratio than VWO, but remains competitively priced for broad emerging markets exposure. Recent one-year total returns favor IEMG, though VWO has experienced a smaller five-year maximum drawdown.

Morgan Stanely analysts expect equities in emerging markets and the Asia-Pacific to outperform the S&P 500 over the next seven years. The Vanguard FTSE Emerging Markets ETF provides exposure to the most important stocks across China, Taiwan, and India.

Emerging markets show strong momentum. With diversification flows rising, a weakening dollar and potential Fed cuts, here are the ETFs to tap the trend.

Emerging-market stocks have broadly crushed the U.S. equities market this year, in one of the biggest market surprises of 2025.

Emerging markets equity returns have been driven by extreme mega-cap concentration, with index breadth collapsing to historic lows and masking weakness across much of the opportunity set. This concentration has distorted relative results for active managers, particularly those constrained by diversification rules or broad benchmarks, as small-cap underperformance and index construction limit flexibility.