Last month Vanguard’s Emerging Market ETF, VWO overtook BlackRock iShares’ ETF, EEM in total assets to become the largest Emerging Market ETF in the US. Both the funds have been swelling in size due to the popularity of this asset class among investors. BlackRock cut the fees of EEM from 0.72% to 0.69% last week. Vanguard responded by slashing the expense ratio on VWO by 5 basis points from 0.27% to 0.22%.
Both track the MSCI Emerging Markets Index.
Among BRIC countries, VWO has limited exposure to India and Russia with it’s largest concentration in Chinese and Brazilian stocks. VWO is currently trading at a discount of 0.67% due to the unrest in Egypt.
The fund has returned more than 12% since inception.
VWO Top 10 Holdings As A Percentage Of Total Assets
|Petroleo Brasileiro SA ADR Type||Brazil||1.8|
|Vale SA Class B ADR||Brazil||1.8|
|China Mobile Ltd.||China||1.5|
|Gazprom OAO ADR||Russia||1.5|
|America Movil SAB de CV||Mexico||1.5|
|Samsung Electronics Co. Ltd. GDR||Taiwan||1.4|
|Industrial & Commercial Bank of China||China||1.1|
|China Construction Bank Corp.||China||1.1|
|CNOOC Ltd.||Hong Kong||1.1|
|Itau Unibanco Holding SA ADR||Brazil||1.0|
VWO Top 10 Countries As A Percentage Of Total Assets
You can also invest in VWO’s mutual fund counterpart VEIEX, and avoid trading fees. VEIEX requires a minimum investment of $3000, has an expense ratio or 0.40% with a purchase fee of 0.50% and a redemption fee of 0.25%.
Hmm! Tough choice!