What you need to know… The S&P 500 Index ($SPX ) (SPY ) on Friday closed down -0.23%, the Dow Jones Industrials Index ($DOWI ) (DIA ) closed down -0.31%, and the Nasdaq 100 Index ($IUXX ) (QQQ ) closed up +0.05%. Stocks on Friday settled mixed, with the S&P...
U.S. President Joe Biden has informed Ukrainian President Volodymyr Zelenskiy that Washington will provide Kyiv with ATACMS long-range missiles, NBC News reported on Friday, citing three U.S. officials and a congressional official.
Wall Street see-sawed on Friday, and closed slightly lower after a tumultuous week during which benchmark Treasury yields hit 16-year highs as investors digested the Federal Reserve's hawkish outlook revisions.
Wall Street turned lower on Friday, reversing an early rebound from Thursday's steep sell-off, and benchmark Treasury yields backed down off 16-year highs as investors neared the end of a tumultuous week.
What happened
Shares of Alibaba Group (NYSE: BABA) were up 4.8% as of 11:21 a.m. ET on Friday. The stock was moving higher on a Bloomberg report that the tech giant could file an initial public offering (IPO) in Hong Kong for its Cainiao logistics business as early as next week.
Wall Street's main indexes bounced back on Friday as U.S. Treasury yields retreated from 16-year highs, while shares of Ford jumped to a one-week high on news of progress in labor talks with the United Auto Workers (UAW) union.
Investors are breathing a sigh of relief on Friday morning, as major market benchmarks are finally showing a bit of resolve after a tough week. As of 11 a.m. ET, the Nasdaq Composite (NASDAQINDEX: ^IXIC) was up nearly 1%, and other indexes showed more modest gains on the day.
The S&P 500 and the Nasdaq made a slight recovery on Friday as Treasury yields retreated from multi-year highs, while shares of Ford jumped on news of progress in labor talks with workers' union.
(RTTNews) - Alibaba Group Holding Ltd. (BABA) shares are gaining more than 4 percent on Friday morning on improved investor sentiments after China considered relaxing limits of foreign ownership of domestically listed firms.
Consumer stocks were advancing pre-bell Friday as the Consumer Staples Select Sector SPDR Fund (XLP) was up 0.1% and the Consumer Discretionary Select Sector SPDR Fund (XLY) was gaining 0.7% recently.
Wall Street's main indexes were on track to open higher on Friday after concerns over interest rates battered stocks in the prior session, while investors awaited data and comments from policymakers to assess the Federal Reserve's next steps.
The NASDAQ 100 Pre-Market Indicator is up 106.93 to 14,801.17. The total Pre-Market volume is currently 40,052,568 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro QQQ (TQQQ) is +0.74 at $36.34, with 4,351,835 shares traded. T
Wall Street index futures inched up on Friday after concerns over interest rates battered stocks in the prior session, while investors awaited data and comments from policymakers to assess the Federal Reserve's next steps.
Futures tracking Wall Street indexes inched up on Friday after concerns over interest rates battered stocks in the prior session, while investors kept a watch on data and comments from policymakers to assess the central bank's next steps.
December S&P 500 futures (ESZ23) are trending up +0.22% this morning after three major U.S. benchmark indices finished the regular session in the red as the latest data on the labor market reinforced the case for the Fed’s stance of holding rates higher for longer.
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which m
Emerging markets are sometimes ignored by investors. However, investing in these markets can still be profitable. Therefore, in this article, we'll take a look at two of the most popular emerging market ETFs, the
Vanguard FTSE Emerging Markets ETF (
NYSEARCA:VWO)
and the
iShares MSCI Emerging Markets ETF (
NYSEARCA:EEM)
, and determine which one looks better.
Why Invest in Emerging Markets?
The International Monetary Fund (IMF) recently forecasted that emerging markets would enjoy 4.1% real GDP growth in 2024, comfortably surpassing the relatively tepid 1.4% real GDP growth predicted for developed markets.
As an added bonus, despite this upside, emerging market stocks are significantly cheaper than their developed market counterparts -- for example, the S&P 500 (
SPX
) sports an average P/E multiple of 20.3, while the average P/E multiple for the iShares MSCI Emerging Markets ETF is just 11.7
U.S. markets have surged this year. The S&P 500 is up 16.5% year-to-date, and the Nasdaq (
NDX
) is up 32%, meaning that it could be a good time to invest in emerging markets as they try to stage a rally to catch up with the U.S. market.
Interestingly, Falcon Wealth Planning President Gabriel Shahin recently told
The Wall Street Journal, “This is a smart contrarian play for investors who want to diversify their portfolios geographically…There is a fire sale going on in emerging-market stocks, and this is one of the smartest plays in equity investing right now.”
What are the VWO and EEM ETF’s Strategies?
The popular VWO is the largest emerging markets ETF with a substantial $72.8 billion in assets under management (AUM). Vanguard says that this ETF “invests in stocks of companies located in emerging markets around the world, such as China, Brazil, Taiwan, and South Africa” by investing in its underlying index, the FTSE Emerging Markets All Cap China A Inclusion Index.
Meanwhile, EEM is far smaller than VWO but still boasts a considerable $20.3 billion in AUM. EEM gives investors “exposure to large and mid-sized companies in emerging markets” by investing in its underlying index, the iShares MSCI Emerging Markets ETF.
Comparing Their Portfolios
VWO offers investors tremendous diversification. It owns an incredible 4,680 stocks, and its top 10 holdings make up just 20.1% of the fund’s assets.
Below, you can take a look at
VWO’s top 10 holdings using TipRanks’ holdings tool.
Many investors will likely be familiar with VWO’s top holding, Taiwan Semiconductor (
NYSE:TSM
), as well as Chinese internet giants like Tencent (
OTC:TCEHY
), Alibaba (
NYSE:BABA
) and Meituan (
OTC:MPNGF
), and India's largest company, Reliance Industries. Note that VWO owns the locally-listed shares of these companies, not the U.S.-listed shares.
The fund is also diversified geographically and across industries. China has a 31.8% weighting in the ETF, followed by India and Taiwan, which have weightings of 18.7% and 17.8%, respectively.
While EEM doesn’t own as many stocks as VWO, it still offers investors plenty of diversification, with 1,246 holdings. Furthermore, its top 10 holdings make up just 22.9% of assets.
Below, you’ll find an overview of
EEM’s top 10 holdings.
Like VWO, EEM’s top holdings include the likes of Taiwan Semiconductor, Tencent, Alibaba, Meituan, Reliance Industries, and more. EEM is similar to VWO when it comes to the geographic breakdown of its investments. China has a 29.6% weighting within the fund, while Taiwan and India have weightings of 15.6% and 14.8%, respectively.
Interestingly, one key difference between the two funds is that EEM has a significant 12.5% weighting towards South Korea, while VWO does not invest in South Korean stocks. This is because EEM's underlying index considers South Korea to be an emerging market, while VWO's does not. That's why Samsung is a top-three holding for EEM but not for VWO.
How Have These ETFs Performed?
In terms of performance, neither of these ETFs has exactly lit the world on fire as emerging markets have underperformed developed markets for many years.
VWO has been roughly flat over the past three years on an annualized basis. Over the past five years, it has had an annualized return of 2.2%, and over the past ten years, it has had an annualized return of 3.5%.
EEM has lost 2.2% on an annualized basis over the past three years. Over the past five years, it has returned a paltry 0.3% on an annualized basis, and over the past 10 years, it has a total annualized return of 2.3%.
So, VWO has slightly outperformed EEM over each time frame, although in reality, neither ETF has much to brag about when it comes to its performance. However, this underperformance versus the U.S. and developed markets is part of what gives these ETFs more potential upside, going forward.
Fees and Expenses
VWO and EEM both offer ample diversification and exposure across emerging markets. Where they really differ is when it comes to their fees.
VWO has a very reasonable expense ratio of just 0.08% -- an investor putting $10,000 into the fund would pay just $8 in fees in year one. EEM charges a significantly higher 0.68%, meaning that an investor putting the same amount into this ETF would pay $68 in fees.
Over time, the disparity in costs really begins to snowball as fees compound. Assuming the fees remain constant and that each fund returns 5% per year going forward, the VWO investor would pay a very reasonable $103 over the course of 10 years, while the EEM investor would pay a much costlier $859 over the same time frame.
Below, you can check out
a comparison of VWO and EEM using TipRanks’ ETF comparison tool, which allows investors to compare up to 20 ETFs at a time based on a variety of customizable criteria.
Dividends
Finally, it should be noted that VWO and EEM are both dividend payers. VWO currently features a superior
dividend yield of 3.5% versus a
2.3% yield for EEM.
And the Winner Is...
Emerging markets seem like a reasonable area to gain exposure to based on the factors discussed above. Both of these ETFs give investors comprehensive exposure to a wide variety of emerging market stocks. VWO has a slightly better track record of performance than EEM and a higher dividend yield. However, their expense ratios are very different, and the considerable gap in fees is what makes VWO the hands-down winner (in my opinion) when it comes to these two major emerging market ETFs.
Disclosure
For Immediate ReleaseChicago, IL – September 20, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the