VWO ETF - A Great ETF by Vanguard for Emerging Markets
πππThe US stock indexes keep notching fresh records of All Time Highs in 2024. The S&P500 Index is now up 7.8% year todate and hit an all time high of 5189.26. Nasdaq is up 7.6% year todate and hit an all time high of 18416.73 while the Dow Jones Index is up 2.6% and hit an all time high of 39,282.28. We wonder if this trend can continue.
So as a diversification to the US, $VANGUARD INTL EQUITY INDEX FUND INC FTSE EMERGING MARKETS ETF(VWO)$ provides the diversification and counterbalance required just in case the US economy should falter.
VWO ETF invests in stocks of companies located in Emerging Markets around the world such as China, Brazil, Taiwan and South Africa. The focus is to track the FTSE Emerging Markets All Cap China A Inclusion Index.
The Top 10 holdings include $Taiwan Semiconductor Manufacturing(TSM)$
TSMC is the top holding 6.3%. It is the world 's largest foundry and chip manufacturer. TSMC makes some of the world' s most advanced chips for Nvidia, AMD, Apple and many others.
Tencent is the world's largest online game developer and publisher by revenue. Tencent's communication and social services connect more than 1 billion people around the world, helping them to keep in touch with family and friends, access transportation, pay for daily necessities and even be entertained.
Alibaba is a Chinese conglomerate specialising in ECommerce , Retail, Internet and Technology.
Reliance Industries is the largest private sector company in India. It is involved in oil refining, petrochemical, gas, retail and textile businesses and has a consolidated sales of more than USD 60 billion.
HDFC Bank is a top bank in India known for its innovation and customer service. It has a large banking network and offers Digital Banking solutions in India which has the world's largest population at 1.44 billion people.
PDD is one of the largest ECommerce companies in China and fastest growing with Temu its international arm marking its presence in over 49 countries.
Meituan owns a popular Chinese platform for locally found consumer products and retail services including entertainment, dining, delivery, travel and other services.
The Top 10 holding weightage is 19.3%. Total number of stocks 5775.
Countries Allocation - India at 20.4%, Hong Kong at 20.4%, Taiwan at 18.4%, Brazil at 6.6%, Mainland China at 5.5%, Saudi Arabia at 4.3%, South Africa at 3.2%, Mexico at 3%, Thailand at 2.4% and Indonesia at 2%.
The expense ratio is a low 0.08%. Distributions are paid every 3 months. The current distribution yield is 3.4%
Performance wise VWO ETF is up 2.4% year todate and 7.38% in 2023.
Emerging markets is a fast growing region with a younger population demographics. Emerging markets equities offer attractive valuation in contrast to the US and other developed markets.
I like VWO ETF for its low cost, value for money way to tap into the fast growing Emerging markets. VWO is very well diversified and offers great dividends while waiting for capital growth.
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