About VWO ETF
Overview:
Incorporated in March 2005, Vanguard Emerging Markets ETF (VWO) is one of the largest ETFs in the world with investments in stocks of companies located in emerging markets around the world, such as China, Brazil, Taiwan, and South Africa and is managed by Vanguard that has a total AUM of $5.1T.
About the Fund Manager:
Founded in 1975, Vanguard is the second largest asset manager in the world managing $5.1T. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares.
Investment Strategy:
VWO tracks the return of the FTSE Emerging Index.
Sector:
VWO has invested in Financials (23%), Technology (22%), Consumer Cyclical (9%), Basic Materials (8%), and Energy (8%).
Geography:
Top Geographical allocation of VWO is China (32%), Taiwan (15%), India (12%), South Africa (6%) and Brazil (6%).
Recommended for:
Growth
VWO is extremely popular for a reason as the low expense ratio charged by this ETF makes it a cheap way to access emerging markets segment. The ETF has the potential for high growth, at high risk and the share value may swing up and down much more than that of stock funds that invest in developed countries, including the United States.
According to ETFdb.com, "VWO can appeal to a number of different investors and can be used as a short-term trading vehicle or as a core holding in a long-term, buy-and-hold portfolio by those who want exposure to developing markets."
Additional Information:
1. Fund Factsheet
2. The Top Vanguard Emerging Market ETF (VWO)
3. Vanguard Emerging Markets ETF: Pros and Cons
4. Why overweighting makes sense for SPY, VWO and HDV
How did we identify this ETF:
A complete pool of 2100+ ETFs is screened on various qualitative and quantitative parameters to evaluate efficiency, tradability and fit. The metrics used were alpha, beta and R-Squared with respect to the segment benchmark and ETF specific metrics such as expense ratio, drawdown, volatility and the overall rating. We evaluate all ETFs and assign a composite score based on our analysis and then select the top ones in a category based on that comprehensive score by the in-house research/quant analysts team. The ETF carries a low expense ratio of just 0.15% beating out most other emerging markets ETFs with an average expense ratio of 1.54%. The strategy is rebalanced on a quarterly basis with the rebalancing mechanism being determined by an algorithm that takes into account the overall performance of the strategy so far.
