VWO vs. VEA

Last updated Jun 24, 2026

VWO (Vanguard FTSE Emerging Markets ETF) and VEA (Vanguard FTSE Developed Markets ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index, while VEA is a Foreign Large Cap Equities fund tracking the FTSE Developed All Cap ex US Index. Both are passively managed. Over the past 10 years, VWO returned 8.97%/yr vs 10.72%/yr for VEA. Their correlation of 0.82 suggests significant overlap in exposure. VWO charges 0.08%/yr vs 0.03%/yr for VEA.

Performance

VWO vs. VEA - Performance Comparison

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

Returns By Period

In the year-to-date period, VWO achieves a 10.55% return, which is significantly lower than VEA's 13.11% return. Over the past 10 years, VWO has underperformed VEA with an annualized return of 8.97%, while VEA has yielded a comparatively higher 10.72% annualized return.

VWO

• 1D: -3.07%
• 1M: 0.76%
• YTD: 10.55%
• 6M: 10.67%
• 1Y: 27.03%
• 3Y*: 17.42%
• 5Y*: 5.09%
• 10Y*: 8.97%

VEA

• 1D: -3.07%
• 1M: 0.11%
• YTD: 13.11%
• 6M: 12.98%
• 1Y: 30.28%
• 3Y*: 19.47%
• 5Y*: 9.50%
• 10Y*: 10.72%

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

VWO vs. VEA - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWO Vanguard FTSE Emerging Markets ETF	10.55%	25.60%	10.59%	9.25%	-17.98%	1.26%	15.17%	20.75%	-14.76%	31.49%
VEA Vanguard FTSE Developed Markets ETF	13.11%	35.16%	3.15%	17.93%	-15.34%	11.66%	9.71%	22.62%	-14.75%	26.42%

Correlation

The correlation between VWO and VEA is 0.82, 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	0.82
Correlation (3Y) Calculated over the trailing 3-year period	0.77
Correlation (5Y) Calculated over the trailing 5-year period	0.78
Correlation (10Y) Calculated over the trailing 10-year period	0.79
Correlation (All Time) Calculated using the full available price history since Jul 26, 2007	0.82

The correlation between VWO and VEA has been stable across timeframes, ranging from 0.77 to 0.82 - a consistent structural relationship.

VWO vs. VEA - Sectors Allocation Comparison

Sectors	VWO	VEA
Technology	31.6%	16.6%
Financial Services	16.8%	22.3%
Consumer Cyclical	8.7%	7.4%
Basic Materials	7.0%	7.5%
Industrials	6.8%	17.5%
Communication Services	5.8%	3.2%
Energy	3.6%	4.7%
Healthcare	3.4%	7.6%
Consumer Defensive	3.1%	5.5%
Utilities	2.4%	3.0%
Real Estate	1.8%	2.5%

Return for Risk

VWO vs. VEA — Risk / Return Rank

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

VWO

VWO Risk / Return Rank: 49
VWO Sharpe Ratio Rank: 48
VWO Sortino Ratio Rank: 46
VWO Omega Ratio Rank: 49
VWO Calmar Ratio Rank: 51
VWO Martin Ratio Rank: 51

VEA

VEA Risk / Return Rank: 55
VEA Sharpe Ratio Rank: 55
VEA Sortino Ratio Rank: 53
VEA Omega Ratio Rank: 55
VEA Calmar Ratio Rank: 55
VEA 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.

VWO vs. VEA - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard FTSE Developed Markets ETF (VEA). 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.

	VWO	VEA	Difference
Sharpe ratio: Return per unit of total volatility	1.60	1.81	-0.21
Sortino ratio: Return per unit of downside risk	2.22	2.48	-0.26
Omega ratio: Gain probability vs. loss probability	1.30	1.33	-0.03
Calmar ratio: Return relative to maximum drawdown	2.43	2.62	-0.18
Martin ratio: Return relative to average drawdown	8.56	10.06	-1.50

VWO vs. VEA - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 1.60, which is comparable to the VEA Sharpe Ratio of 1.81. The chart below compares the historical Sharpe Ratios of VWO and VEA, 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

VWO vs. VEA - Drawdown Comparison

The maximum VWO drawdown since its inception was -67.68%, which is greater than VEA's maximum drawdown of -60.68%. Use the drawdown chart below to compare losses from any high point for VWO and VEA.

Drawdown Indicators

	VWO	VEA	Difference
Max Drawdown Largest peak-to-trough decline	-67.68%	-60.68%	-7.00%
Max Drawdown (1Y) Largest decline over 1 year	-11.17%	-11.63%	+0.46%
Max Drawdown (3Y) Largest decline over 3 years	-17.37%	-13.45%	-3.92%
Max Drawdown (5Y) Largest decline over 5 years	-32.60%	-29.71%	-2.89%
Max Drawdown (10Y) Largest decline over 10 years	-36.39%	-35.73%	-0.66%
Current Drawdown Current decline from peak	-3.07%	-3.07%	0.00%
Average Drawdown Average peak-to-trough decline	-15.79%	-13.26%	-2.53%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.17%	3.02%	+0.15%

Volatility

VWO vs. VEA - Volatility Comparison

Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard FTSE Developed Markets ETF (VEA) have volatilities of 7.37% and 7.09%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VWO	VEA	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.37%	7.09%	+0.28%
Volatility (6M) Calculated over the trailing 6-month period	14.62%	14.74%	-0.12%
Volatility (1Y) Calculated over the trailing 1-year period	16.94%	16.79%	+0.15%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.58%	16.76%	+0.82%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.18%	17.21%	+1.97%

VWO vs. VEA - Expense Ratio Comparison

VWO has a 0.08% expense ratio, which is higher than VEA's 0.03% 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. VEA - Dividend Comparison

VWO's dividend yield for the trailing twelve months is around 2.33%, less than VEA's 2.58% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEA Vanguard FTSE Developed Markets ETF	2.58%	3.22%	3.35%	3.15%	2.91%	3.16%	2.04%	3.04%	3.35%	2.77%	3.05%	2.92%
VWO Vanguard FTSE Emerging Markets ETF	2.33%	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 VWO and VEA in my portfolio?

VWO and VEA have a correlation of 0.82, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VWO or VEA?

VWO has higher volatility (7.37%) compared to VEA (7.09%). In terms of maximum drawdown, VWO dropped -67.68% vs VEA's -60.68%.

Which ETF is better, VWO or VEA?

On 10-year performance, VEA leads with 10.72% vs 8.97% for VWO. On fees, VEA is cheaper at 0.03% per year. On volatility, VEA has been the lower-risk option at 7.09%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VWO or VEA?

Over the 10-year period, VEA has performed better with a 10.72% return vs 8.97%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VWO or VEA?

VEA is cheaper with a 0.03% expense ratio, compared with 0.08% for VWO.

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

VEA has the higher dividend yield at 2.58%, compared with 2.33% for VWO.

What is the main difference between VWO and VEA?

VWO is categorized as Emerging Markets Equities, while VEA is Foreign Large Cap Equities. VWO tracks FTSE Emerging Index, while VEA tracks FTSE Developed All Cap ex US Index. Their fees differ too: 0.08% for VWO and 0.03% for VEA.

Which has better risk-adjusted returns?

VEA currently has the higher Sharpe Ratio (1.81 vs 1.60), 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.