Vanguard VWO ETF - A Great Way To Invest In Emerging Markets
πππEmerging Markets have largely been ignored by investors and yet they have the greatest upside potential compared to Developed Markets.
The International Monetary Fund or IMF has recently forecasted that Emerging Markets would enjoy 4.1% real GDP growth in 2024, much better than the 1.4% real GDP growth predicted for Developed Markets.
Despite this upside, Emerging Markets are significantly cheaper than Developed Markets. The S&P500's average Price to Earnings (PE) ratio is 20.3 compared to 12.2 for $VANGUARD INTL EQUITY INDEX FUND INC FTSE EMERGING MARKETS ETF(VWO)$
The S&P500 Index is up 16.5% year todate while Nasdaq 100 is up 32%. Emerging Markets may stage a rally to catch up with the US markets.
VWO ETF is the largest Emerging Markets ETF with USD 98.7 Billion Assets Under Management. This ETF invests in stocks of companies located in Emerging Markets around the world which includes China, Brazil, Taiwan, India and even Saudi Arabia.
VWO is very well diversified with 4684 holdings. The expense ratio is a low 0.08%.
The Top 10 holdings include $Taiwan Semiconductor Manufacturing(TSM)$
Reliance Industries of India which is the largest private sector company there involved in oil refining, petrochemical, gas, retail and textile businesses and has consolidated sales of over USD 60 billion.
It also includes Vale SA of Brazil which is one of the largest mining companies in the world with assets in iron ore, nickel, copper and coal.
Top 10 Countries are Hong Kong, India, Taiwan, Brazil, China, Saudi Arabia, South Africa, Mexico, Thailand and Indonesia.
Distributions are paid quarterly. The current Distribution Yield is 3.04%.
Performance wise, VWO ETF is up 1% today and 5% in 1 year.
Compared to the US and Developed Markets, VWO has underperformed but that is why it has more upside potential going forward.
Contrarians have been rewarded in the past by taking an opposite view of the markets. Investing in VWO would make me a contrarian. However at the last closing price of USD 39.65, $VANGUARD INTL EQUITY INDEX FUND INC FTSE EMERGING MARKETS ETF(VWO)$ offers me a tremendous value for money. VWO is very well diversified not only in companies but in regions. I believe countries like China, India, Brazil, South Africa would leap frog into the future with explosive growth ahead.
$VANGUARD INTL EQUITY INDEX FUND INC FTSE EMERGING MARKETS ETF(VWO)$ is my Tactical and Strategic Bet on these wonderful countries in Emerging Markets to supercharge my portfolio into an exciting and rewarding future.
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it proves that even in a choppy environment, a tactical bet on fast-growth stocks across Asia, South America or elsewhere could pay off
Emerging market stocks aren't typically popular in "risk off" environments for investors.
That said, it's undeniable that emerging markets hold tremendous potential despite their risks.
That means a lot more can go wrong if and when global growth trends hit a snag
Great ariticle, would you like to share it?
Great ariticle, would you like to share it?
Great ariticle, would you like to share it?