Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Vanguard MSCI Emerging Markets ETF (NYSE: VWO ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Vanguard MSCI Emerging Markets and see what CAPS investors are saying about the ETF right now.
Vanguard MSCI Emerging Markets facts
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Inception
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March 2005
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ETF Total Net Assets
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$40.8 billion
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Investment Approach
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Seeks to track the performance of the MSCI Emerging Markets Index
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Expense Ratio
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0.22%
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Dividend Yield
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2.2%
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1-Year / 3-Year / 5-Year Annualized Returns
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(22.5%) / 6.9% / 3.6%
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Best YTD Performers Among Top 10 Holdings
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China Mobile (NYSE: CHL ) ; Taiwan Semiconductor (NYSE: TSM )
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Alternatives
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iShares MSCI Emerging Markets Index (NYSE: EEM )
WisdomTree Emerging Markets Equity (NYSE: DEM )
SPDR S&P Emerging Markets Small Cap (NYSE: EWX )
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Source: Morningstar and Motley Fool CAPS.
On CAPS, 98% of the 1,554 members who have rated Vanguard MSCI Emerging Markets believe the ETF will outperform the S&P 500 going forward. These bulls include All-Star 4thRockFool, who is ranked in the top 15% of our community, and ArfytheSeal.
This past August, 4thRockFool summed up the outperform argument:
Emerging markets will have higher growth rates than the developed markets for the foreseeable future. Vanguard is a the low cost way to get a diversified basket of stocks in these volatile but high growth markets. 2% dividend is a bonus.
In fact, Vanguard MSCI Emerging Markets sports a particularly low expense ratio of 0.22%. That's less than that of category peers such as iShares MSCI Emerging Markets Index (0.68%), WisdomTree Emerging Markets Equity (0.63%), and SPDR S&P Emerging Markets Small Cap (0.66%).
Back in May, CAPS member ArfytheSeal elaborated on the bull case:
VWO is an ETF tracking emerging markets. The fund is compelling now IMHO given its composite forward p/e ratio is only around 12x. While the fund does have some heavy allocations to cyclical industries and materials (typical of an emerging markets fund), VWO has a solid long-term track record and low expense rate. The fund has a fairly solid allocation to China (17% as of April 30) and Brazil (16%). This fund is volatile but should outperform over a five year span.
What do you think about Vanguard MSCI Emerging Markets, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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