# How Vanguard FTSE Emerging Markets ETF (VWO) compares with the whole market and its popular alternatives

> Source: EasyCompare research, https://easycompare.io/research/vwo
> Data as of October 20, 2026. Total returns include reinvested dividends. Past performance does not predict future results; nothing here is investment advice.

Built by QuantCommons' quantitative engine, this page is about relative opportunity, not data on VWO alone. It places VWO (Vanguard FTSE Emerging Markets ETF) against 20+ popular alternatives, its neighboring categories and the entire market of over 10,000 U.S.-listed stocks and ETFs, and surfaces what has done better on consistent outperformance, return for the risk taken, behavior in real market crashes and diversification. The result is a clearer view of where VWO stands in the market, and of the alternatives worth a closer look.

Period covered: VWO's full trading record, from March 2005 through September 2026. The crash tests reach back to 2000 using older funds and the S&P 500. All returns include reinvested dividends. Data as of October 20, 2026.

## Key findings

- **Right now:** Over the past 6 months, VWO fell 0.8% while the S&P 500 rose 9.1%. Not every peer went the same way. Over the past 6 months, SPYM (State Street SPDR Portfolio S&P 500 ETF) rose 9.1% and EMQQ (EMQQ The Emerging Markets Internet ETF) fell 11.3%.
- **Fund or market?:** VWO rose 0.7% over the past 3 months, in line with the emerging markets ETF EEM (iShares MSCI Emerging Markets ETF), which fell 0.4%. The S&P 500 rose 3.9%.
- **Long term:** VWO turned $10,000 into $20,200 over the past decade, against $42,100 in the S&P 500.
- **In a crash:** Across six sell-offs, VWO has typically fallen 1.2 times as far as the S&P 500.
- **Diversification:** VWO is some diversification, but not a hedge: a correlation of 0.63 with the S&P 500 over 5 years and 0.64 with the total US market, less closely than 70% of ETFs with at least $100 million in assets. When the S&P 500 had a down month, VWO usually fell with it (17 of 22 months).
- **Better options**
  - **Popular alternatives:** VXUS (Vanguard Total International Stock ETF), DEM (WisdomTree Emerging Markets High Dividend Fund) and DGS (WisdomTree Emerging Markets SmallCap Dividend Fund) earned more than VWO with less volatility over the past 5 years. VXUS returned 8.2% a year at 16.4% volatility, against 5.2% a year at 17.5%.
  - **Nearby categories and themes:** DFIV (Dimensional - International Value ETF, international equity) and LVHI (Franklin International Low Volatility High Dividend Index ETF, international equity) earned more than VWO with less volatility over the past 5 years. DFIV returned 14.8% a year at 16.4% volatility, against 5.2% a year at 17.5%.
  - **Whole market:** 224 of the 3,633 stocks and funds worth at least $500 million earned more than VWO with less volatility over the past 5 years, among them VXUS (Vanguard Total International Stock ETF), VTV (Vanguard Morningstar Value ETF) and VIG (Vanguard Dividend Appreciation ETF).

## How much would $10,000 in VWO have grown?

This chart tracks a hypothetical $10,000 investment in VWO over the past 19 years, with dividends reinvested, alongside the same amount in the S&P 500, investments that ended ahead of VWO over the same span and VWO's popular alternatives, among those that traded for the entire period.

- $10,000 invested in VWO at the end of September 2007 would have grown to $19,401 by September 2026, less than the $70,725 it would have become in SPY, an S&P 500 fund.
- Five of the six other investments on the chart ended ahead of VWO, and XLV finished highest, at $66,201.

## VWO at a glance

This section summarizes the key facts about the fund, its returns over periods from one to ten years and the risk it has carried, with dividends reinvested throughout.

- VWO's deepest decline since it began trading in 2005 was 67.7%, from October 2007 to November 2008. It took about nine years from the low to climb back to its old high.
- Over 20 full calendar years, VWO's best was 2009, when it returned 76.3%, and its worst was 2008, when it lost 52.5%. It lost money in seven of those years.
- VWO is 5.0% below its all-time high.

- Type: ETF, International (Asset Management - Global)
- Trading since: March 10, 2005
- Assets: $165B
- Expense ratio: 0.06%
- Volatility (5 years): 17.5%; Sharpe ratio: 0.38
- Worst decline ever: −67.7%, from October 31, 2007 to November 20, 2008; back at its high by September 11, 2017

| Period | VWO total return |
| --- | --- |
| 1 month | −4.7% |
| 3 months | +0.7% |
| 6 months | −0.8% |
| year to date | +6.4% |
| 1 year | +8.3% |
| 3 years | +67.2% |
| 5 years | +29.1% |
| 10 years | +102% |

## VWO against the whole market

Where VWO ranks among every stock and fund, and what across the market has done better.

### How does VWO rank among all ETFs?

This section ranks VWO on return, volatility, risk-adjusted return and worst decline against every ETF worth at least $100 million with enough history.

- VWO lands in the broad middle of the market on every measure here. VWO's 3-year return ranks in the top 43% of the 1,949 ETFs with at least $100 million in assets with 3 years of history.

| Measure | VWO | Rank |
| --- | --- | --- |
| 1-year return | +8.3% | 1,406 of 2,485 (top 57%) |
| 3-year return | +67.2% | 834 of 1,949 (top 43%) |
| 5-year return | +29.1% | 1,014 of 1,560 (top 65%) |
| 10-year return | +102% | 650 of 958 (top 68%) |
| Volatility, 5 years | 17.5% | 909 of 1,560 (top 59%) |
| Sharpe ratio, 5 years | 0.38 | 1,121 of 1,560 (top 72%) |
| Worst decline, past 10 years | −36.4% | 411 of 951 (top 44%) |

### What has beaten VWO on both return and risk?

Each dot is an investment, placed by how much it earned a year over the past 5 years (higher is better) and how much its price swung, its volatility (further left is calmer).

- Four stocks and 220 ETFs worth at least $500 million sit in the green region: each earned more than VWO over the past 5 years with smaller price swings. That is 6% of the 3,633 screened.
- Among those with at least half VWO's swings, LVHI has the best return for its risk: 17.0% a year at 11.1% volatility, 37% less than VWO's 17.5%, and a Sharpe ratio (return above cash per unit of volatility) of 1.48 against 0.38 for VWO.
- Among VWO's popular alternatives, DEM, VXUS and DGS are in the region. DEM earned 9.6% a year against 5.2% a year for VWO, at 15.5% volatility, 11% less than VWO's 17.5%.

### Is there a better investment than VWO?

The table below lists investments that beat VWO over the past 5 years on at least one of these measures: a higher annual return with lower volatility, a higher annual return at similar volatility, a similar return with lower volatility, a higher Sharpe ratio with a smaller worst decline, a higher total return in most periods from 3 months to 10 years, or smaller losses in recent market crashes, and, for funds, the same exposure at a lower expense ratio.

- Among VWO's popular alternatives, VXUS, DEM and DGS earned more than VWO with less volatility over the past 5 years. VXUS returned 8.2% a year at 16.4% volatility, against 5.2% a year at 17.5%.
- Looking beyond its popular alternatives, DFIV (international equity) and LVHI (international equity) earned more than VWO with less volatility over the past 5 years. DFIV returned 14.8% a year at 16.4% volatility, against 5.2% a year at 17.5%.
- Across the whole market, 224 of the 3,633 stocks and funds worth at least $500 million earned more than VWO with less volatility over the past 5 years, among them VXUS, VTV and VIG.

The 15 strongest of 224 investments that beat VWO over the past 5 years, out of 3,633 stocks and funds worth at least $500 million.

| Investment | Group | Annual return (5 years) | Volatility | Sharpe | Worst decline (10 years) | 10Y return | Correlation with VWO | Better on |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| VWO: Vanguard FTSE Emerging Markets ETF (this page) |  | +5.2% | 17.5% | 0.38 | −36.4% | +102% |  |  |
| PTLC: Pacer Trendpilot US Large Cap ETF | Broad Market | +9.5% | 11.8% | 0.83 | −26.6% | +188% | 0.49 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| ACWV: iShares MSCI Global Min Vol Factor ETF | International | +6.3% | 10.3% | 0.65 | −28.8% | +116% | 0.60 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [XLV](https://easycompare.io/research/xlv): State Street Health Care Select Sector SPDR ETF | Health Care Equity | +8.4% | 15.3% | 0.60 | −28.4% | +202% | 0.32 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| XLP: State Street Consumer Staples Select Sector SPDR ETF | Consumer Staples | +7.2% | 13.8% | 0.57 | −24.5% | +121% | 0.45 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| JAVA: JPMorgan Active Value ETF | US Large-Cap Value | +11.5% | 14.5% | 0.82 | −16.5% | — |  | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| QYLD: Global X - Nasdaq 100 Covered Call ETF | Equity Income | +8.4% | 15.0% | 0.62 | −24.7% | +156% | 0.51 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| DFIV: Dimensional - International Value ETF | International Equity | +14.8% | 16.4% | 0.93 | −25.4% | — | 0.72 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| USMC: Principal U.S. Mega-Cap ETF | Broad Market | +14.1% | 16.4% | 0.89 | −30.0% | — | 0.59 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| FTLS: First Trust Long/Short Equity ETF | Broad Market | +10.2% | 10.4% | 0.99 | −20.6% | +158% | 0.55 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| DFAI: Dimensional - International Core Equity Market ETF | Developed International Equity | +9.7% | 16.0% | 0.66 | −27.4% | — | 0.78 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| DIVI: Franklin International Core Dividend Tilt Index ETF | International | +13.4% | 15.5% | 0.89 | −27.7% | +184% | 0.78 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| AOA: iShares Core 80/20 Aggressive Allocation ETF | Multi-Asset | +8.6% | 13.1% | 0.69 | −28.4% | +165% | 0.78 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| SCHY: Schwab International Dividend Equity ETF | International | +9.5% | 13.3% | 0.75 | −24.0% | — | 0.71 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| FHLC: Fidelity MSCI Health Care Index ETF | Healthcare | +7.3% | 15.4% | 0.53 | −28.8% | +199% | 0.36 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| QDPL: Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF | Dividend & Income | +11.8% | 15.0% | 0.82 | −22.6% | — | 0.63 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |

## VWO against its popular alternatives

The investments people most often weigh against VWO, compared period by period and year by year.

### How do VWO's risk and return compare with its alternatives?

This map plots each investment's annual return over the past 5 years against its volatility, the size of its typical price swings.

- Ten of the 23 popular alternatives, led by FNDE, DEM and VEA, were both more rewarding and calmer than VWO over the past 5 years, earning a higher annual return with lower volatility.
- Over the past 5 years, VWO returned 5.2% a year, less than the S&P 500's 12.7%, with higher volatility (17.5% against 17.1%).

### Has VWO consistently beaten its popular alternatives?

This section compares VWO with the investments people most often weigh against it, checking each one over eight periods from one month to ten years.

- 17 of the 25 popular alternatives, led by SPYM, PIE and FNDE, outperformed VWO in at least 3 of 5 short-term and 2 of 3 long-term timeframes.
- SPYM, PIE and FNDE outperformed VWO in every long-term period and in all but one short-term period, the most consistent record in the group.
- SPYM, EELV and VEA earned more for the risk they took than VWO (a higher Sharpe ratio) and fell less in their worst decline of the past 10 years.

| Investment | 1Y return | 3Y return | 5Y return | 10Y return | Periods ahead of VWO | Verdict | Sharpe |
| --- | --- | --- | --- | --- | --- | --- | --- |
| VWO: Vanguard FTSE Emerging Markets ETF (this page) | +8.3% | +67.2% | +29.1% | +102% |  |  | 0.38 |
| [SPYM](https://easycompare.io/research/spym): State Street SPDR Portfolio S&P 500 ETF | +15.9% | +89.8% | +82.5% | +324% | 5/5 short-term, 3/3 long-term | all-weather | 0.80 |
| PIE: Invesco Dorsey Wright Emerging Markets Momentum ETF | +43.6% | +103% | +53.1% | +156% | 5/5 short-term, 3/3 long-term | all-weather | 0.51 |
| FNDE: Schwab Fundamental Emerging Markets Large Company Index ETF | +20.7% | +90.6% | +59.9% | +151% | 5/5 short-term, 3/3 long-term | all-weather | 0.64 |
| DEM: WisdomTree Emerging Markets High Dividend Fund | +23.0% | +69.9% | +58.2% | +133% | 5/5 short-term, 3/3 long-term | all-weather | 0.67 |
| XCEM: Columbia EM Core ex-China ETF | +31.9% | +96.0% | +64.9% | +165% | 4/5 short-term, 3/3 long-term | all-weather | 0.61 |
| [VEA](https://easycompare.io/research/vea): Vanguard FTSE Developed Markets ETF | +17.0% | +81.0% | +55.9% | +153% | 4/5 short-term, 3/3 long-term | all-weather | 0.61 |
| [VXUS](https://easycompare.io/research/vxus): Vanguard Total International Stock ETF | +14.6% | +77.2% | +48.6% | +140% | 4/5 short-term, 3/3 long-term | all-weather | 0.57 |
| SPEM: State Street SPDR Portfolio Emerging Markets ETF | +9.9% | +70.4% | +33.1% | +114% | 4/5 short-term, 3/3 long-term | all-weather | 0.42 |
| EMGF: iShares Emerging Markets Equity Factor ETF | +19.6% | +92.4% | +54.3% | +140% | 3/5 short-term, 3/3 long-term | consistent | 0.56 |
| [IEMG](https://easycompare.io/research/iemg): iShares Core MSCI Emerging Markets ETF | +17.0% | +83.4% | +39.0% | +122% | 3/5 short-term, 3/3 long-term | consistent | 0.44 |
| GEM: Goldman Sachs ActiveBeta Emerging Markets Equity ETF | +18.3% | +83.9% | +42.1% | +113% | 3/5 short-term, 3/3 long-term | consistent | 0.47 |
| EEM: iShares MSCI Emerging Markets ETF | +17.6% | +84.9% | +35.7% | +110% | 3/5 short-term, 3/3 long-term | consistent | 0.41 |
| DGS: WisdomTree Emerging Markets SmallCap Dividend Fund | +13.6% | +57.4% | +42.7% | +119% | 4/5 short-term, 2/3 long-term | consistent | 0.54 |
| EEMS: iShares MSCI Emerging Markets Small-Cap ETF | +10.6% | +52.9% | +34.7% | +114% | 4/5 short-term, 2/3 long-term | consistent | 0.44 |
| EMXC: iShares MSCI Emerging Markets ex China ETF | +33.9% | +106% | +69.5% | — | 4/5 short-term, 2/3 long-term | consistent | 0.64 |
| AVEM: Avantis Emerging Markets Equity ETF | +19.7% | +91.0% | +56.1% | — | 3/5 short-term, 2/3 long-term | consistent | 0.56 |
| DFAE: Dimensional - Emerging Core Equity Market ETF | +18.1% | +83.5% | +49.3% | — | 3/5 short-term, 2/3 long-term | consistent | 0.52 |
| JPEM: JPMorgan Diversified Return Emerging Markets Equity ETF | +13.1% | +54.9% | +37.9% | +92.5% | 4/5 short-term, 1/3 long-term |  | 0.55 |
| DFEM: Dimensional - Emerging Markets Core Equity 2 ETF | +18.3% | +80.9% | — | — | 4/5 short-term, 1/3 long-term |  | — |
| SCHE: Schwab Emerging Markets Equity ETF | +8.8% | +69.8% | +29.9% | +104% | 3/5 short-term, 1/3 long-term |  | 0.38 |
| EWW: iShares MSCI Mexico ETF | +18.4% | +57.6% | +77.4% | +89.7% | 3/5 short-term, 1/3 long-term |  | 0.62 |
| EELV: Invesco S&P Emerging Markets Low Volatility ETF | +9.5% | +47.4% | +38.3% | +87.1% | 2/5 short-term, 1/3 long-term |  | 0.63 |
| EEMV: iShares MSCI Emerging Markets Min Vol Factor ETF | +14.2% | +54.1% | +29.2% | +75.5% | 4/5 short-term, 0/3 long-term |  | 0.47 |
| EMQQ: EMQQ The Emerging Markets Internet ETF | −27.7% | +18.2% | −39.4% | +27.4% | 1/5 short-term, 0/3 long-term |  | -0.15 |
| EMB: iShares J.P. Morgan USD Emerging Markets Bond ETF | −0.6% | +32.6% | +6.7% | +26.4% | 1/5 short-term, 0/3 long-term |  | 0.18 |

### How did VWO do year by year?

This table shows each investment's total return in every full calendar year since 2006, along with where VWO ranked among its popular alternatives each year.

- VWO finished ahead of the S&P 500 in seven of its 20 full calendar years.
- Among its popular alternatives, XCEM came out ahead of VWO most often, in six of the ten years both traded.
- Ranked against its popular alternatives each year, VWO finished in the top quarter in five of 18 years and in the bottom quarter in three. In 2025, it ranked 17 of 25.

| Year | VWO | SPY |
| --- | --- | --- |
| 2025 | +25.6% | +17.7% |
| 2024 | +10.6% | +24.9% |
| 2023 | +9.3% | +26.2% |
| 2022 | −18.0% | −18.2% |
| 2021 | +1.3% | +28.7% |
| 2020 | +15.2% | +18.3% |
| 2019 | +20.8% | +31.2% |
| 2018 | −14.8% | −4.6% |
| 2017 | +31.5% | +21.7% |
| 2016 | +12.2% | +12.0% |

## Risk and diversification

How VWO has fallen, how it held up in crashes beside the S&P 500 and its popular alternatives, and what moves independently of it.

### What were VWO's worst declines?

A drawdown is the decline from a peak to the lowest point before a new high.

- In all five of VWO's worst declines, the S&P 500 held up better over the same dates.
- Not every decline was the market's doing: VWO fell 34.3% from February 2021 to October 2022, while the S&P 500 slipped only 1.0%.
- The slowest recovery came after VWO fell 67.7% from October 2007 to November 2008; it did not regain that peak until September 2017, nine years later.

| Decline | Peak | Low | Back at the high | SPY over the same dates | Market event |
| --- | --- | --- | --- | --- | --- |
| −67.7% | October 31, 2007 | November 20, 2008 | September 11, 2017 | −50.2% | 2008 financial crisis |
| −36.4% | January 26, 2018 | March 23, 2020 | November 9, 2020 | −18.8% | late-2018 sell-off |
| −34.3% | February 17, 2021 | October 24, 2022 | June 26, 2025 | −1.0% | 2022 bear market |
| −25.9% | May 9, 2006 | June 13, 2006 | December 4, 2006 | −7.6% |  |
| −18.1% | July 23, 2007 | August 16, 2007 | September 21, 2007 | −7.7% |  |

### How did VWO do in stock market crashes?

This section measures how far VWO, the S&P 500 and each alternative fell from peak to trough during every major market crash since 2000.

- Among its popular alternatives, EELV held up best, falling less than VWO in all six crashes they both traded through.
- VWO fell less than the S&P 500 in four of the nine crashes it has traded through. The clearest case was the late-2018 sell-off, when VWO fell 11.3% and the S&P 500 fell 19.3%.

| Crash | Dates | VWO fall | SPY fall |
| --- | --- | --- | --- |
| Dot-com bust | March 10, 2000 to October 9, 2002 | not trading | −47.5% |
| Global financial crisis | October 9, 2007 to March 9, 2009 | −67.7% | −55.2% |
| Flash crash | May 6, 2010 to May 7, 2010 | 0.0% | −1.5% |
| Euro debt crisis | July 22, 2011 to October 3, 2011 | −27.9% | −17.9% |
| China devaluation & oil rout | August 10, 2015 to February 11, 2016 | −23.8% | −12.8% |
| Volmageddon | February 2, 2018 to February 9, 2018 | −6.8% | −6.5% |
| Q4 2018 selloff | September 21, 2018 to December 24, 2018 | −11.3% | −19.3% |
| COVID crash | February 19, 2020 to March 23, 2020 | −30.6% | −33.7% |
| 2022 bear market | January 4, 2022 to October 12, 2022 | −27.9% | −24.5% |
| SVB / regional bank stress | March 8, 2023 to March 13, 2023 | −2.7% | −3.4% |

### How closely does VWO move with the S&P 500?

Upside capture measures how much of the S&P 500's gains an investment kept in the months the market rose, and downside capture how much of its losses it took in the months the market fell.

- EELV took just 65% of the S&P 500's losses, against 75% for VWO, while still keeping 54% of its gains.
- Over the past 10 years, VWO captured 63% of the S&P 500's gains in rising months and 75% of its losses in falling months, with a beta of 0.69. Its share of the market's losses was larger than its share of the gains.
- Eight of the 20 popular alternatives had a higher capture ratio (upside capture divided by downside capture) than VWO's 0.84, led by PIE, XCEM and FNDE.

Measured over the past 10 years of monthly returns against SPY.

| Investment | Upside capture | Downside capture | Beta |
| --- | --- | --- | --- |
| VWO: Vanguard FTSE Emerging Markets ETF (this page) | 63.0% | 75.0% | 0.69 |
| PIE: Invesco Dorsey Wright Emerging Markets Momentum ETF | 71.0% | 75.0% | 0.83 |
| FNDE: Schwab Fundamental Emerging Markets Large Company Index ETF | 72.0% | 79.0% | 0.71 |
| DEM: WisdomTree Emerging Markets High Dividend Fund | 67.0% | 74.0% | 0.69 |
| XCEM: Columbia EM Core ex-China ETF | 81.0% | 88.0% | 0.90 |
| [VEA](https://easycompare.io/research/vea): Vanguard FTSE Developed Markets ETF | 81.0% | 96.0% | 0.86 |
| [VXUS](https://easycompare.io/research/vxus): Vanguard Total International Stock ETF | 76.0% | 91.0% | 0.82 |
| SPEM: State Street SPDR Portfolio Emerging Markets ETF | 65.0% | 76.0% | 0.69 |
| EMGF: iShares Emerging Markets Equity Factor ETF | 71.0% | 77.0% | 0.76 |
| [IEMG](https://easycompare.io/research/iemg): iShares Core MSCI Emerging Markets ETF | 71.0% | 83.0% | 0.77 |
| GEM: Goldman Sachs ActiveBeta Emerging Markets Equity ETF | 68.0% | 80.0% | 0.74 |
| EEM: iShares MSCI Emerging Markets ETF | 70.0% | 84.0% | 0.77 |
| DGS: WisdomTree Emerging Markets SmallCap Dividend Fund | 70.0% | 84.0% | 0.78 |
| EEMS: iShares MSCI Emerging Markets Small-Cap ETF | 71.0% | 87.0% | 0.83 |
| JPEM: JPMorgan Diversified Return Emerging Markets Equity ETF | 60.0% | 75.0% | 0.64 |
| SCHE: Schwab Emerging Markets Equity ETF | 63.0% | 76.0% | 0.68 |
| EWW: iShares MSCI Mexico ETF | 71.0% | 96.0% | 0.88 |
| EELV: Invesco S&P Emerging Markets Low Volatility ETF | 54.0% | 65.0% | 0.55 |
| EEMV: iShares MSCI Emerging Markets Min Vol Factor ETF | 50.0% | 61.0% | 0.55 |
| EMQQ: EMQQ The Emerging Markets Internet ETF | 61.0% | 107% | 0.76 |
| EMB: iShares J.P. Morgan USD Emerging Markets Bond ETF | 36.0% | 56.0% | 0.46 |

### What diversifies VWO?

Correlation measures how closely two investments move together, on a scale from 1 (in lockstep) through 0 (unrelated) to -1 (in opposite directions).

- Moving a fifth of the money in VWO into MCK would have cut the portfolio's volatility by 15% over the past 5 years and raised its annual return (+6.6% for VWO alone, +12.4% for the mix).
- CAH made money in five of the seven calendar years in which VWO lost money.
- Among large ETFs, DXJ, EMLP and HDV have moved largely independently of VWO over the past 5 years, with correlations of 0.45 or lower, and each still earned a positive 5-year return.

| Investment | Correlation with VWO | 5Y return | Volatility | Sharpe | Rose in VWO's 7 down years |
| --- | --- | --- | --- | --- | --- |
| DXJ: WisdomTree Japan Hedged Equity Fund | 0.45 | +225% | 19.1% | 1.34 | 4 of 7 |
| EMLP: First Trust North American Energy Infrastructure Fund | 0.42 | +101% | 14.5% | 1.04 | 3 of 7 |
| HDV: iShares Core High Dividend ETF | 0.45 | +83.3% | 13.0% | 1.00 | 3 of 7 |
| [GLD](https://easycompare.io/research/gld): SPDR Gold Shares | 0.47 | +126% | 18.9% | 0.96 | 2 of 7 |
| SPMO: Invesco S&P 500 Momentum ETF | 0.47 | +136% | 20.8% | 0.93 | 0 of 7 |
| [XLE](https://easycompare.io/research/xle): State Street Energy Select Sector SPDR ETF | 0.14 | +177% | 25.5% | 0.93 | 3 of 7 |
| AMLP: Alerian MLP ETF | 0.18 | +111% | 18.9% | 0.89 | 4 of 7 |
| PTLC: Pacer Trendpilot US Large Cap ETF | 0.49 | +57.4% | 11.8% | 0.83 | 1 of 7 |

## Common questions

### What was VWO's worst drawdown?

VWO's deepest decline since it began trading in 2005 was 67.7%, from October 2007 to November 2008. It took about nine years from the low to climb back to its old high. Because VWO launched in March 2005, that record does not include the dot-com bust.

### What were VWO's best and worst years?

Over 20 full calendar years, VWO's best year was 2009, when it returned 76.3%. Its worst was 2008, with a return of -52.5%.

### Is there a better investment than VWO?

Among VWO's popular alternatives, VXUS, DEM and DGS earned more than VWO with less volatility over the past 5 years. VXUS returned 8.2% a year at 16.4% volatility, against 5.2% a year at 17.5%. Looking beyond its popular alternatives, DFIV (international equity) and LVHI (international equity) earned more than VWO with less volatility over the past 5 years. DFIV returned 14.8% a year at 16.4% volatility, against 5.2% a year at 17.5%.

### Is VWO more volatile than the S&P 500?

Yes. VWO's volatility over the past 5 years was 17.5%, 1.0 times the S&P 500's 17.1%. Volatility measures how widely returns swing around their average: in roughly two years out of three, VWO's return lands within 17.5% of its average, either way. The higher it is, the rougher the ride and the harder it is to hold through a slump.

### What is VWO's Sharpe ratio?

VWO's Sharpe ratio over the past 5 years was 0.38, against 0.79 for the S&P 500, so VWO earned less for each unit of risk than an index fund did. The Sharpe ratio is the return earned above cash for each unit of volatility: two investments with the same return are not equal if one got there with far bigger swings.

### How correlated is VWO with the S&P 500?

Over the past 5 years, VWO's monthly returns had a correlation of 0.63 with the S&P 500. Correlation runs from 1 (moving in lockstep) through 0 (unrelated) to −1 (moving in opposite directions). They often move together: some diversification next to an index fund, but not a cushion. In the table, the correlation column measures each option against VWO instead: the lower it is, the more that option would diversify a VWO holding.

### What are the best alternatives to VWO?

Of the 25 popular alternatives we compared, 17 outperformed VWO in at least 3 of 5 short-term and 2 of 3 long-term timeframes, with dividends reinvested: SPYM, PIE and FNDE.

### Did VWO outperform the S&P 500?

VWO finished ahead of the S&P 500 (SPY) in seven of 20 full calendar years. In 2025, it returned +25.6%, against +17.7% for the index.

### How did VWO do in stock market crashes?

VWO fell less than the S&P 500 (SPY) in four of the nine major crashes it has traded through, and further in four. The clearest case was the late-2018 sell-off, when VWO fell 11.3% and the S&P 500 fell 19.3%.

### What diversifies VWO?

These had a low correlation with VWO over the past 5 years and still earned a positive 5-year return: among large ETFs, DXJ (correlation 0.45), EMLP (correlation 0.42) and HDV (correlation 0.45); among large stocks, CAH (correlation 0.14), CLS (correlation 0.31) and FIX (correlation 0.25). A correlation near zero means the two have moved largely independently.

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## Explore further

- Full page with charts: https://easycompare.io/research/vwo
- All research pages: https://easycompare.io/llms.txt
- Compare the entire market against VWO live: https://betterthanspy.com/?b=VWO&utm_source=easycompare&utm_medium=research