VWO vs. IAGG
VWO (Vanguard FTSE Emerging Markets ETF) and IAGG (iShares Core International Aggregate Bond ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index, while IAGG is a Global Bonds fund tracking the Bloomberg Global Aggregate ex USD 10% Issuer Capped (Hedged) Index. Both are passively managed. Over the past 10 years, VWO returned 8.60%/yr vs 2.12%/yr for IAGG. At a 0.05 correlation, their price movements are largely independent. VWO charges 0.08%/yr vs 0.07%/yr for IAGG.
Performance
VWO vs. IAGG - Performance Comparison
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Returns By Period
In the year-to-date period, VWO achieves a 8.50% return, which is significantly higher than IAGG's 0.72% return. Over the past 10 years, VWO has outperformed IAGG with an annualized return of 8.60%, while IAGG has yielded a comparatively lower 2.12% annualized return.
VWO
- 1D
- 0.52%
- 1M
- -3.65%
- YTD
- 8.50%
- 6M
- 9.73%
- 1Y
- 24.29%
- 3Y*
- 16.22%
- 5Y*
- 4.65%
- 10Y*
- 8.60%
IAGG
- 1D
- -0.14%
- 1M
- -0.18%
- YTD
- 0.72%
- 6M
- 0.87%
- 1Y
- 2.26%
- 3Y*
- 4.55%
- 5Y*
- 1.05%
- 10Y*
- 2.12%
VWO vs. IAGG - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VWO Vanguard FTSE Emerging Markets ETF | 8.50% | 25.60% | 10.59% | 9.25% | -17.98% | 1.26% | 15.17% | 20.75% | -14.76% | 31.49% |
IAGG iShares Core International Aggregate Bond ETF | 0.72% | 3.26% | 4.51% | 8.49% | -10.86% | -1.87% | 4.63% | 7.99% | 3.38% | 2.09% |
Correlation
The correlation between VWO and IAGG is 0.40, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.40 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.24 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.16 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.06 |
Correlation (All Time) Calculated using the full available price history since Nov 13, 2015 | 0.05 |
Over the past year, VWO and IAGG have become more correlated (0.40) than their long-term average of 0.05, meaning their price movements have been converging.
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Return for Risk
VWO vs. IAGG — Risk / Return Rank
VWO
IAGG
VWO vs. IAGG - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) and iShares Core International Aggregate Bond ETF (IAGG). 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.
| VWO | IAGG | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.69 | ||
| Sortino ratioReturn per unit of downside risk | +0.91 | ||
| Omega ratioGain probability vs. loss probability | 1.28 | 1.14 | +0.14 |
| Calmar ratioReturn relative to maximum drawdown | 2.18 | 0.98 | +1.21 |
| Martin ratioReturn relative to average drawdown | 7.79 | 2.91 | +4.89 |
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month. | |||
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Sharpe Ratios by Period
| VWO | IAGG | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.49 | 0.80 | +0.69 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.27 | 0.23 | +0.03 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.45 | 0.53 | -0.08 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.26 | 0.61 | -0.35 |
Drawdowns
VWO vs. IAGG - Drawdown Comparison
The maximum VWO drawdown since its inception was -67.68%, which is greater than IAGG's maximum drawdown of -13.88%. Use the drawdown chart below to compare losses from any high point for VWO and IAGG.
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Drawdown Indicators
| VWO | IAGG | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -67.68% | -13.88% | -53.80% |
Max Drawdown (1Y)Largest decline over 1 year | -11.17% | -2.32% | -8.85% |
Max Drawdown (3Y)Largest decline over 3 years | -17.37% | -2.32% | -15.05% |
Max Drawdown (5Y)Largest decline over 5 years | -32.60% | -13.57% | -19.03% |
Max Drawdown (10Y)Largest decline over 10 years | -36.39% | -13.88% | -22.51% |
Current DrawdownCurrent decline from peak | -4.67% | -1.18% | -3.49% |
Average DrawdownAverage peak-to-trough decline | -15.81% | -2.84% | -12.97% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 3.12% | 0.78% | +2.34% |
Volatility
VWO vs. IAGG - Volatility Comparison
Vanguard FTSE Emerging Markets ETF (VWO) has a higher volatility of 6.29% compared to iShares Core International Aggregate Bond ETF (IAGG) at 1.09%. This indicates that VWO's price experiences larger fluctuations and is considered to be riskier than IAGG based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VWO | IAGG | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 6.29% | 1.09% | +5.20% |
Volatility (6M)Calculated over the trailing 6-month period | 13.80% | 2.41% | +11.39% |
Volatility (1Y)Calculated over the trailing 1-year period | 16.37% | 2.84% | +13.53% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 17.45% | 4.51% | +12.94% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 19.23% | 4.05% | +15.18% |
VWO vs. IAGG - Expense Ratio Comparison
VWO has a 0.08% expense ratio, which is higher than IAGG's 0.07% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Dividends
VWO vs. IAGG - Dividend Comparison
VWO's dividend yield for the trailing twelve months is around 2.49%, less than IAGG's 3.67% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
IAGG iShares Core International Aggregate Bond ETF | 3.67% | 3.08% | 4.28% | 3.55% | 2.27% | 1.16% | 1.95% | 2.82% | 3.02% | 1.74% | 1.56% | 0.13% |
VWO Vanguard FTSE Emerging Markets ETF | 2.49% | 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
VWO and IAGG have a correlation of 0.40, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VWO has higher volatility (6.29%) compared to IAGG (1.09%). In terms of maximum drawdown, VWO dropped -67.68% vs IAGG's -13.88%.
On 10-year performance, VWO leads with 8.60% vs 2.12% for IAGG. On fees, IAGG is cheaper at 0.07% per year. On volatility, IAGG has been the lower-risk option at 1.09%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, VWO has performed better with a 8.60% return vs 2.12%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
IAGG is cheaper with a 0.07% expense ratio, compared with 0.08% for VWO.
IAGG has the higher dividend yield at 3.67%, compared with 2.49% for VWO.
VWO is categorized as Emerging Markets Equities, while IAGG is Global Bonds. VWO tracks FTSE Emerging Index, while IAGG tracks Bloomberg Global Aggregate ex USD 10% Issuer Capped (Hedged) Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.08% for VWO and 0.07% for IAGG.
VWO currently has the higher Sharpe Ratio (1.49 vs 0.80), 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.
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