Vanguard FTSE Emerging Markets ETF

VWO

Market cap $104B

Goldman Sachs thinks stocks across Asia and various emerging markets will beat the S&P 500 (the benchmark for the U.S. market) over the next 10 years. The Vanguard FTSE Pacific ETF provides exposure to stocks in Asian economies, especially Japan, Australia, and Korea.

Stretched U.S. valuations and AI bubble fears have investors looking abroad and are driving interest in international equity and emerging market ETFs.

As bubble fears rise and volatility spikes, investors can turn to ETFs like RSP, GLD and IEMG to diversify and cut concentration risk.

VWO and EEM both offer exposure to large- and mid-cap stocks, with each fund offering distinct sector exposures and portfolio breadth. VWO stands out for its much lower expense ratio and broader diversification.

Vanguard FTSE Emerging Markets ETF offers low-cost, diversified exposure to emerging market equities, with a 2.78% yield and strong liquidity. VWO is well-positioned to benefit from U.S. interest rate easing and improved trade relations, particularly with China and other Asian economies. Risks include currency, inflation, and trade policy exposure, but VWO's broad diversification helps mitigate some of these concerns.

Global equities strategies are having a moment this year. The SPDR S&P 500 ETF in isolation looks strong, posting an 18.3% year-to-date gain.

Diversification can cut the impact of a crash by spreading risk across global cycles. Recent outperformance shows non-U.S. assets can lead recoveries.

The on-again-off-again trade war between the U.S. and China is enough to keep investors guessing. Some investors are avoiding China stocks.

Last week FTSE made its annual review of country classification within its global equity indices (see the announcement here). One of the most interesting changes was Vietnam's upgrade from frontier to emerging market.

Wall Street warns of an AI equity bubble as mega-cap tech surges, prompting investors to diversify into ETFs for balanced growth.