HEEM vs. VWO

Last updated Jun 23, 2026

HEEM (iShares Currency Hedged MSCI Emerging Markets ETF) and VWO (Vanguard FTSE Emerging Markets ETF) are both exchange-traded funds - HEEM is a Emerging Markets Diversified fund tracking the MSCI Emerging Markets 100% USD Hedged Index, while VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index. Both are passively managed. Over the past 10 years, HEEM returned 11.96%/yr vs 9.31%/yr for VWO. Their correlation of 0.93 suggests significant overlap in exposure. HEEM charges 0.72%/yr vs 0.08%/yr for VWO.

Performance

HEEM vs. VWO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) and Vanguard FTSE Emerging Markets ETF (VWO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, HEEM achieves a 33.26% return, which is significantly higher than VWO's 14.05% return. Over the past 10 years, HEEM has outperformed VWO with an annualized return of 11.96%, while VWO has yielded a comparatively lower 9.31% annualized return.

HEEM

• 1D: 0.46%
• 1M: 9.01%
• YTD: 33.26%
• 6M: 34.02%
• 1Y: 65.45%
• 3Y*: 28.15%
• 5Y*: 11.19%
• 10Y*: 11.96%

VWO

• 1D: 0.77%
• 1M: 3.96%
• YTD: 14.05%
• 6M: 14.71%
• 1Y: 32.13%
• 3Y*: 18.64%
• 5Y*: 5.90%
• 10Y*: 9.31%

*Multi-year figures are annualized to reflect compound growth (CAGR)

HEEM vs. VWO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
HEEM iShares Currency Hedged MSCI Emerging Markets ETF	33.26%	34.02%	12.59%	10.14%	-16.85%	-1.82%	17.94%	18.53%	-11.09%	27.59%
VWO Vanguard FTSE Emerging Markets ETF	14.05%	25.60%	10.59%	9.25%	-17.98%	1.26%	15.17%	20.75%	-14.76%	31.49%

Correlation

The correlation between HEEM and VWO is 0.92, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.92
Correlation (3Y) Calculated over the trailing 3-year period	0.93
Correlation (5Y) Calculated over the trailing 5-year period	0.94
Correlation (10Y) Calculated over the trailing 10-year period	0.94
Correlation (All Time) Calculated using the full available price history since Sep 25, 2014	0.93

The correlation between HEEM and VWO has been stable across timeframes, ranging from 0.92 to 0.94 - a consistent structural relationship.

HEEM vs. VWO - Sectors Allocation Comparison

Sectors	HEEM	VWO
Technology	43.9%	31.6%
Financial Services	18.2%	16.8%
Consumer Cyclical	7.7%	8.7%
Communication Services	6.0%	5.8%
Industrials	5.9%	6.8%
Basic Materials	5.8%	7.0%
Energy	3.3%	3.6%
Consumer Defensive	2.6%	3.1%
Healthcare	2.4%	3.4%
Utilities	1.9%	2.4%
Real Estate	0.9%	1.8%

Return for Risk

HEEM vs. VWO — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

HEEM

HEEM Risk / Return Rank: 93
HEEM Sharpe Ratio Rank: 94
HEEM Sortino Ratio Rank: 92
HEEM Omega Ratio Rank: 93
HEEM Calmar Ratio Rank: 93
HEEM Martin Ratio Rank: 93

VWO

VWO Risk / Return Rank: 60
VWO Sharpe Ratio Rank: 60
VWO Sortino Ratio Rank: 58
VWO Omega Ratio Rank: 61
VWO Calmar Ratio Rank: 60
VWO Martin Ratio Rank: 59

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

HEEM vs. VWO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) and Vanguard FTSE Emerging Markets ETF (VWO). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	HEEM	VWO	Difference
Sharpe ratio: Return per unit of total volatility	3.33	1.94	+1.39
Sortino ratio: Return per unit of downside risk	4.19	2.66	+1.53
Omega ratio: Gain probability vs. loss probability	1.63	1.36	+0.27
Calmar ratio: Return relative to maximum drawdown	6.07	2.89	+3.18
Martin ratio: Return relative to average drawdown	22.82	10.19	+12.63

HEEM vs. VWO - Sharpe Ratio Comparison

The current HEEM Sharpe Ratio is 3.33, which is higher than the VWO Sharpe Ratio of 1.94. The chart below compares the historical Sharpe Ratios of HEEM and VWO, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

HEEM vs. VWO - Drawdown Comparison

The maximum HEEM drawdown since its inception was -33.53%, smaller than the maximum VWO drawdown of -67.68%. Use the drawdown chart below to compare losses from any high point for HEEM and VWO.

Drawdown Indicators

	HEEM	VWO	Difference
Max Drawdown Largest peak-to-trough decline	-33.53%	-67.68%	+34.15%
Max Drawdown (1Y) Largest decline over 1 year	-10.83%	-11.17%	+0.34%
Max Drawdown (3Y) Largest decline over 3 years	-14.82%	-17.37%	+2.55%
Max Drawdown (5Y) Largest decline over 5 years	-30.60%	-32.60%	+2.00%
Max Drawdown (10Y) Largest decline over 10 years	-33.53%	-36.39%	+2.86%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-11.10%	-15.79%	+4.69%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.88%	3.16%	-0.28%

Volatility

HEEM vs. VWO - Volatility Comparison

iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) has a higher volatility of 10.25% compared to Vanguard FTSE Emerging Markets ETF (VWO) at 6.57%. This indicates that HEEM's price experiences larger fluctuations and is considered to be riskier than VWO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	HEEM	VWO	Difference
Volatility (1M) Calculated over the trailing 1-month period	10.25%	6.57%	+3.68%
Volatility (6M) Calculated over the trailing 6-month period	17.76%	14.28%	+3.48%
Volatility (1Y) Calculated over the trailing 1-year period	19.82%	16.67%	+3.15%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.48%	17.53%	-0.05%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.18%	19.24%	-1.06%

HEEM vs. VWO - Expense Ratio Comparison

HEEM has a 0.72% expense ratio, which is higher than VWO's 0.08% expense ratio.

Dividends

HEEM vs. VWO - Dividend Comparison

HEEM's dividend yield for the trailing twelve months is around 2.98%, more than VWO's 2.26% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
HEEM iShares Currency Hedged MSCI Emerging Markets ETF	2.98%	3.98%	2.38%	2.75%	7.49%	1.93%	1.49%	3.04%	2.37%	2.05%	1.84%	6.28%
VWO Vanguard FTSE Emerging Markets ETF	2.26%	2.79%	3.20%	3.52%	4.11%	2.63%	1.91%	3.23%	2.88%	2.30%	2.52%	3.26%

Frequently Asked Questions

Can I hold both HEEM and VWO in my portfolio?

With a correlation of 0.92, HEEM and VWO move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, HEEM or VWO?

HEEM has higher volatility (10.25%) compared to VWO (6.57%). In terms of maximum drawdown, HEEM dropped -33.53% vs VWO's -67.68%.

Which ETF is better, HEEM or VWO?

On 10-year performance, HEEM leads with 11.96% vs 9.31% for VWO. On fees, VWO is cheaper at 0.08% per year. On volatility, VWO has been the lower-risk option at 6.57%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, HEEM or VWO?

Over the 10-year period, HEEM has performed better with a 11.96% return vs 9.31%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, HEEM or VWO?

VWO is cheaper with a 0.08% expense ratio, compared with 0.72% for HEEM.

Which ETF pays a higher dividend yield, HEEM or VWO?

HEEM has the higher dividend yield at 2.98%, compared with 2.26% for VWO.

What is the main difference between HEEM and VWO?

HEEM is categorized as Emerging Markets Diversified, while VWO is Emerging Markets Equities. HEEM tracks MSCI Emerging Markets 100% USD Hedged Index, while VWO tracks FTSE Emerging Index. They also come from different issuers: iShares and Vanguard. Their fees differ too: 0.72% for HEEM and 0.08% for VWO.

Which has better risk-adjusted returns?

HEEM currently has the higher Sharpe Ratio (3.33 vs 1.94), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.