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VWO vs. IWM
Performance
Return for Risk
Drawdowns
Volatility
Dividends

VWO vs. IWM

Last updated Jun 13, 2026

VWO (Vanguard FTSE Emerging Markets ETF) and IWM (iShares Russell 2000 ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index, while IWM is a Small Cap Blend Equities fund tracking the Russell 2000 Index. Both are passively managed. Over the past 10 years, VWO returned 9.00%/yr vs 11.27%/yr for IWM. A 0.68 correlation means they provide meaningful diversification when combined. VWO charges 0.08%/yr vs 0.19%/yr for IWM.

Performance

VWO vs. IWM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Emerging Markets ETF (VWO) and iShares Russell 2000 ETF (IWM). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, VWO achieves a 10.77% return, which is significantly lower than IWM's 19.22% return. Over the past 10 years, VWO has underperformed IWM with an annualized return of 9.00%, while IWM has yielded a comparatively higher 11.27% annualized return.

VWO

1D
0.76%
1M
-0.68%
YTD
10.77%
6M
12.57%
1Y
26.52%
3Y*
16.61%
5Y*
5.03%
10Y*
9.00%

IWM

1D
0.87%
1M
2.99%
YTD
19.22%
6M
16.00%
1Y
41.75%
3Y*
17.23%
5Y*
6.07%
10Y*
11.27%
*Multi-year figures are annualized to reflect compound growth (CAGR)

VWO vs. IWM - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
VWO
Vanguard FTSE Emerging Markets ETF		10.77%25.60%10.59%9.25%-17.98%1.26%15.17%20.75%-14.76%31.49%
IWM
iShares Russell 2000 ETF		19.22%12.66%11.38%16.83%-20.48%14.54%20.03%25.39%-11.12%14.58%

Correlation

The correlation between VWO and IWM is 0.66, 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

0.66

Correlation (3Y)
Calculated over the trailing 3-year period

0.60

Correlation (5Y)
Calculated over the trailing 5-year period

0.62

Correlation (10Y)
Calculated over the trailing 10-year period

0.61

Correlation (All Time)
Calculated using the full available price history since Mar 10, 2005

0.68

The correlation between VWO and IWM has been stable across timeframes, ranging from 0.60 to 0.68 - a consistent structural relationship.

VWO vs. IWM - Sectors Allocation Comparison

Sectors
VWO
IWM

Technology

29.6%
19.5%

Financial Services

19.5%
15.6%

Consumer Cyclical

10.7%
7.9%

Industrials

8.0%
17.2%

Basic Materials

8.0%
4.5%

Communication Services

7.1%
2.1%

Energy

4.6%
5.8%

Healthcare

3.9%
16.1%

Consumer Defensive

3.7%
2.1%

Utilities

2.9%
3.0%

Real Estate

2.2%
5.6%

Technology

VWO
29.6%
IWM
19.5%

Financial Services

VWO
19.5%
IWM
15.6%

Consumer Cyclical

VWO
10.7%
IWM
7.9%

Industrials

VWO
8.0%
IWM
17.2%

Basic Materials

VWO
8.0%
IWM
4.5%

Communication Services

VWO
7.1%
IWM
2.1%

Energy

VWO
4.6%
IWM
5.8%

Healthcare

VWO
3.9%
IWM
16.1%

Consumer Defensive

VWO
3.7%
IWM
2.1%

Utilities

VWO
2.9%
IWM
3.0%

Real Estate

VWO
2.2%
IWM
5.6%

Compare stocks, funds, or ETFs

Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.

Vanguard FTSE Emerging Markets ETF

iShares Russell 2000 ETF

Often compared with VWO:
VWO vs. VEAVWO vs. IEMGVWO vs. VXUSVWO vs. EEMVWO vs. VOOVWO vs. VTIVWO vs. VEMAX
Often compared with IWM:
IWM vs. SPYIWM vs. VTWOIWM vs. IJRIWM vs. AVUVIWM vs. IWNIWM vs. VOOIWM vs. IWO

Return for Risk

VWO vs. IWM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
VWO
VWO Risk / Return Rank: 5050
Overall Rank
VWO Sharpe Ratio Rank: 4949
Sharpe Ratio Rank
VWO Sortino Ratio Rank: 4747
Sortino Ratio Rank
VWO Omega Ratio Rank: 5151
Omega Ratio Rank
VWO Calmar Ratio Rank: 5050
Calmar Ratio Rank
VWO Martin Ratio Rank: 5252
Martin Ratio Rank
IWM
IWM Risk / Return Rank: 7272
Overall Rank
IWM Sharpe Ratio Rank: 7171
Sharpe Ratio Rank
IWM Sortino Ratio Rank: 7171
Sortino Ratio Rank
IWM Omega Ratio Rank: 6363
Omega Ratio Rank
IWM Calmar Ratio Rank: 7979
Calmar Ratio Rank
IWM Martin Ratio Rank: 7676
Martin Ratio Rank
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.

VWO vs. IWM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) and iShares Russell 2000 ETF (IWM). 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.

VWOIWMDifference
Sharpe ratioReturn per unit of total volatility
1.49
1.99

-0.50

Sortino ratioReturn per unit of downside risk
2.10
2.75

-0.65

Omega ratioGain probability vs. loss probability

1.28

1.33

-0.05

Calmar ratioReturn relative to maximum drawdown

2.21

3.57

-1.35

Martin ratioReturn relative to average drawdown

7.80

12.63

-4.82

VWO vs. IWM - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 1.49, which is comparable to the IWM Sharpe Ratio of 1.99. The chart below compares the historical Sharpe Ratios of VWO and IWM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Drawdowns

VWO vs. IWM - Drawdown Comparison

The maximum VWO drawdown since its inception was -67.68%, which is greater than IWM's maximum drawdown of -59.05%. Use the drawdown chart below to compare losses from any high point for VWO and IWM.

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Drawdown Indicators

VWOIWMDifference

Max Drawdown

Largest peak-to-trough decline

-67.68%

-59.05%

-8.63%

Max Drawdown (1Y)

Largest decline over 1 year

-11.17%

-11.03%

-0.14%

Max Drawdown (3Y)

Largest decline over 3 years

-17.37%

-27.50%

+10.13%

Max Drawdown (5Y)

Largest decline over 5 years

-32.60%

-31.91%

-0.69%

Max Drawdown (10Y)

Largest decline over 10 years

-36.39%

-41.13%

+4.74%

Current Drawdown

Current decline from peak

-2.68%

0.00%

-2.68%

Average Drawdown

Average peak-to-trough decline

-15.80%

-10.76%

-5.04%

Ulcer Index

Depth and duration of drawdowns from previous peaks

3.17%

3.12%

+0.05%

Volatility

VWO vs. IWM - Volatility Comparison

The current volatility for Vanguard FTSE Emerging Markets ETF (VWO) is 6.64%, while iShares Russell 2000 ETF (IWM) has a volatility of 7.16%. This indicates that VWO experiences smaller price fluctuations and is considered to be less risky than IWM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

VWOIWMDifference

Volatility (1M)

Calculated over the trailing 1-month period

6.64%

7.16%

-0.52%

Volatility (6M)

Calculated over the trailing 6-month period

14.04%

14.29%

-0.25%

Volatility (1Y)

Calculated over the trailing 1-year period

16.54%

19.73%

-3.19%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

17.48%

22.61%

-5.13%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

19.22%

23.08%

-3.86%

VWO vs. IWM - Expense Ratio Comparison

VWO has a 0.08% expense ratio, which is lower than IWM's 0.19% expense ratio. Despite the difference, 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. IWM - Dividend Comparison

VWO's dividend yield for the trailing twelve months is around 2.44%, more than IWM's 0.87% yield.

PositionTTM20252024202320222021202020192018201720162015
IWM
iShares Russell 2000 ETF		0.87%1.04%1.15%1.35%1.48%0.94%1.04%1.26%1.40%1.26%1.38%1.54%
VWO
Vanguard FTSE Emerging Markets ETF		2.44%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 IWM have a correlation of 0.66, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

IWM has higher volatility (7.16%) compared to VWO (6.64%). In terms of maximum drawdown, VWO dropped -67.68% vs IWM's -59.05%.

On 10-year performance, IWM leads with 11.27% vs 9.00% for VWO. On fees, VWO is cheaper at 0.08% per year. On volatility, VWO has been the lower-risk option at 6.64%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, IWM has performed better with a 11.27% return vs 9.00%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

VWO is cheaper with a 0.08% expense ratio, compared with 0.19% for IWM.

VWO has the higher dividend yield at 2.44%, compared with 0.87% for IWM.

VWO is categorized as Emerging Markets Equities, while IWM is Small Cap Blend Equities. VWO tracks FTSE Emerging Index, while IWM tracks Russell 2000 Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.08% for VWO and 0.19% for IWM.

IWM currently has the higher Sharpe Ratio (1.99 vs 1.49), 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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