VGK vs. EWJ

Last updated Jun 9, 2026

VGK (Vanguard FTSE Europe ETF) and EWJ (iShares MSCI Japan ETF) are both exchange-traded funds - VGK is a Europe Equities fund tracking the FTSE Developed Europe All Cap Index, while EWJ is a Japan Equities fund tracking the MSCI Japan Index. Both are passively managed. Over the past 10 years, VGK returned 9.63%/yr vs 9.21%/yr for EWJ. A 0.69 correlation means they provide meaningful diversification when combined. VGK charges 0.06%/yr vs 0.49%/yr for EWJ.

Performance

VGK vs. EWJ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Europe ETF (VGK) and iShares MSCI Japan ETF (EWJ). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VGK achieves a 5.17% return, which is significantly lower than EWJ's 13.88% return. Both investments have delivered pretty close results over the past 10 years, with VGK having a 9.63% annualized return and EWJ not far behind at 9.21%.

VGK

• 1D: 0.45%
• 1M: -0.68%
• YTD: 5.17%
• 6M: 8.47%
• 1Y: 16.29%
• 3Y*: 16.24%
• 5Y*: 8.08%
• 10Y*: 9.63%

EWJ

• 1D: 1.36%
• 1M: -0.29%
• YTD: 13.88%
• 6M: 14.67%
• 1Y: 30.27%
• 3Y*: 17.05%
• 5Y*: 8.50%
• 10Y*: 9.21%

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

VGK vs. EWJ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VGK Vanguard FTSE Europe ETF	5.17%	35.83%	1.88%	20.19%	-15.98%	16.89%	5.43%	24.85%	-14.89%	26.98%
EWJ iShares MSCI Japan ETF	13.88%	25.84%	7.03%	20.29%	-17.72%	1.16%	15.40%	19.34%	-14.10%	24.27%

Correlation

The correlation between VGK and EWJ is 0.72, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.72
Correlation (3Y) Calculated over the trailing 3-year period	0.67
Correlation (5Y) Calculated over the trailing 5-year period	0.70
Correlation (10Y) Calculated over the trailing 10-year period	0.70
Correlation (All Time) Calculated using the full available price history since Mar 10, 2005	0.69

The correlation between VGK and EWJ has been stable across timeframes, ranging from 0.67 to 0.72 - a consistent structural relationship.

VGK vs. EWJ - Sectors Allocation Comparison

Sectors	VGK	EWJ
Financial Services	23.6%	17.5%
Industrials	19.3%	26.0%
Healthcare	11.9%	6.3%
Consumer Defensive	8.4%	3.6%
Technology	8.2%	19.1%
Consumer Cyclical	6.8%	12.2%
Basic Materials	5.3%	3.0%
Energy	5.3%	1.1%
Utilities	4.7%	1.1%
Communication Services	3.3%	7.9%
Real Estate	1.5%	2.3%

Return for Risk

VGK vs. EWJ — Risk / Return Rank

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

VGK

VGK Risk / Return Rank: 32
VGK Sharpe Ratio Rank: 32
VGK Sortino Ratio Rank: 32
VGK Omega Ratio Rank: 31
VGK Calmar Ratio Rank: 30
VGK Martin Ratio Rank: 36

EWJ

EWJ Risk / Return Rank: 50
EWJ Sharpe Ratio Rank: 48
EWJ Sortino Ratio Rank: 50
EWJ Omega Ratio Rank: 51
EWJ Calmar Ratio Rank: 50
EWJ Martin Ratio Rank: 49

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.

VGK vs. EWJ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Europe ETF (VGK) and iShares MSCI Japan ETF (EWJ). 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.

	VGK	EWJ	Difference
Sharpe ratio: Return per unit of total volatility	1.05	1.53	-0.48
Sortino ratio: Return per unit of downside risk	1.55	2.21	-0.66
Omega ratio: Gain probability vs. loss probability	1.19	1.29	-0.10
Calmar ratio: Return relative to maximum drawdown	1.35	2.24	-0.88
Martin ratio: Return relative to average drawdown	5.01	7.56	-2.54
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VGK vs. EWJ - Sharpe Ratio Comparison

The current VGK Sharpe Ratio is 1.05, which is lower than the EWJ Sharpe Ratio of 1.53. The chart below compares the historical Sharpe Ratios of VGK and EWJ, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VGK	EWJ	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.05	1.53	-0.48
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.45	0.47	-0.01
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.51	0.53	-0.02
Sharpe Ratio (All Time) Calculated using the full available price history	0.28	0.11	+0.16

Drawdowns

VGK vs. EWJ - Drawdown Comparison

The maximum VGK drawdown since its inception was -63.61%, roughly equal to the maximum EWJ drawdown of -60.93%. Use the drawdown chart below to compare losses from any high point for VGK and EWJ.

Drawdown Indicators

	VGK	EWJ	Difference
Max Drawdown Largest peak-to-trough decline	-63.61%	-60.93%	-2.68%
Max Drawdown (1Y) Largest decline over 1 year	-12.09%	-13.59%	+1.50%
Max Drawdown (3Y) Largest decline over 3 years	-14.31%	-14.68%	+0.37%
Max Drawdown (5Y) Largest decline over 5 years	-32.74%	-33.14%	+0.40%
Max Drawdown (10Y) Largest decline over 10 years	-37.24%	-33.14%	-4.10%
Current Drawdown Current decline from peak	-2.83%	-2.32%	-0.51%
Average Drawdown Average peak-to-trough decline	-13.34%	-21.73%	+8.39%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.26%	4.02%	-0.76%

Volatility

VGK vs. EWJ - Volatility Comparison

The current volatility for Vanguard FTSE Europe ETF (VGK) is 4.86%, while iShares MSCI Japan ETF (EWJ) has a volatility of 5.21%. This indicates that VGK experiences smaller price fluctuations and is considered to be less risky than EWJ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VGK	EWJ	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.86%	5.21%	-0.35%
Volatility (6M) Calculated over the trailing 6-month period	12.97%	15.51%	-2.54%
Volatility (1Y) Calculated over the trailing 1-year period	15.57%	19.89%	-4.32%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.92%	18.31%	-0.39%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.97%	17.31%	+1.66%

VGK vs. EWJ - Expense Ratio Comparison

VGK has a 0.06% expense ratio, which is lower than EWJ's 0.49% expense ratio.

Dividends

VGK vs. EWJ - Dividend Comparison

VGK's dividend yield for the trailing twelve months is around 2.83%, less than EWJ's 3.97% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
EWJ iShares MSCI Japan ETF	3.97%	4.52%	2.34%	2.03%	1.23%	2.08%	1.04%	2.03%	1.71%	1.25%	1.95%	1.27%
VGK Vanguard FTSE Europe ETF	2.83%	2.86%	3.61%	3.15%	3.25%	3.05%	2.11%	3.27%	3.95%	2.70%	3.52%	3.25%

Frequently Asked Questions

Can I hold both VGK and EWJ in my portfolio?

VGK and EWJ have a correlation of 0.72, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VGK or EWJ?

EWJ has higher volatility (5.21%) compared to VGK (4.86%). In terms of maximum drawdown, VGK dropped -63.61% vs EWJ's -60.93%.

Which ETF is better, VGK or EWJ?

On 10-year performance, VGK leads with 9.63% vs 9.21% for EWJ. On fees, VGK is cheaper at 0.06% per year. On volatility, VGK has been the lower-risk option at 4.86%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VGK or EWJ?

Over the 10-year period, VGK has performed better with a 9.63% return vs 9.21%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VGK or EWJ?

VGK is cheaper with a 0.06% expense ratio, compared with 0.49% for EWJ.

Which ETF pays a higher dividend yield, VGK or EWJ?

EWJ has the higher dividend yield at 3.97%, compared with 2.83% for VGK.

What is the main difference between VGK and EWJ?

VGK is categorized as Europe Equities, while EWJ is Japan Equities. VGK tracks FTSE Developed Europe All Cap Index, while EWJ tracks MSCI Japan Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.06% for VGK and 0.49% for EWJ.

Which has better risk-adjusted returns?

EWJ currently has the higher Sharpe Ratio (1.53 vs 1.05), 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.