VWO vs. VEU

Last updated Jun 4, 2026

VWO (Vanguard FTSE Emerging Markets ETF) and VEU (Vanguard FTSE All-World ex-US ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index, while VEU is a Foreign Large Cap Equities fund tracking the FTSE All-World ex US Index. Both are passively managed. Over the past 10 years, VWO returned 8.85%/yr vs 9.94%/yr for VEU. Their correlation of 0.88 suggests significant overlap in exposure. VWO charges 0.08%/yr vs 0.04%/yr for VEU.

Performance

VWO vs. VEU - Performance Comparison

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

Returns By Period

In the year-to-date period, VWO achieves a 12.22% return, which is significantly lower than VEU's 14.60% return. Over the past 10 years, VWO has underperformed VEU with an annualized return of 8.85%, while VEU has yielded a comparatively higher 9.94% annualized return.

VWO

• 1D: -1.41%
• 1M: 2.72%
• YTD: 12.22%
• 6M: 13.79%
• 1Y: 30.72%
• 3Y*: 18.02%
• 5Y*: 5.17%
• 10Y*: 8.85%

VEU

• 1D: -0.98%
• 1M: 5.07%
• YTD: 14.60%
• 6M: 17.34%
• 1Y: 32.37%
• 3Y*: 19.62%
• 5Y*: 8.67%
• 10Y*: 9.94%

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

VWO vs. VEU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWO Vanguard FTSE Emerging Markets ETF	12.22%	25.60%	10.59%	9.25%	-17.98%	1.26%	15.17%	20.75%	-14.76%	31.49%
VEU Vanguard FTSE All-World ex-US ETF	14.60%	32.35%	5.56%	15.84%	-15.58%	8.27%	11.10%	21.83%	-14.18%	27.40%

Correlation

The correlation between VWO and VEU is 0.88, 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	0.88
Correlation (3Y) Calculated over the trailing 3-year period	0.87
Correlation (5Y) Calculated over the trailing 5-year period	0.87
Correlation (10Y) Calculated over the trailing 10-year period	0.88
Correlation (All Time) Calculated using the full available price history since Mar 9, 2007	0.88

The correlation between VWO and VEU has been stable across timeframes, ranging from 0.87 to 0.88 - a consistent structural relationship.

VWO vs. VEU - Sectors Allocation Comparison

Sectors	VWO	VEU
Technology	29.6%	18.5%
Financial Services	19.5%	23.3%
Consumer Cyclical	10.7%	8.2%
Industrials	8.0%	15.7%
Basic Materials	8.0%	7.1%
Communication Services	7.1%	4.6%
Energy	4.6%	5.2%
Healthcare	3.9%	7.1%
Consumer Defensive	3.7%	5.1%
Utilities	2.9%	3.2%
Real Estate	2.2%	2.0%

Return for Risk

VWO vs. VEU — Risk / Return Rank

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

VWO

VWO Risk / Return Rank: 56
VWO Sharpe Ratio Rank: 56
VWO Sortino Ratio Rank: 55
VWO Omega Ratio Rank: 57
VWO Calmar Ratio Rank: 54
VWO Martin Ratio Rank: 56

VEU

VEU Risk / Return Rank: 60
VEU Sharpe Ratio Rank: 62
VEU Sortino Ratio Rank: 61
VEU Omega Ratio Rank: 62
VEU Calmar Ratio Rank: 56
VEU Martin Ratio Rank: 61

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. VEU - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard FTSE All-World ex-US ETF (VEU). 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	VEU	Difference
Sharpe ratio Return per unit of total volatility	1.94	2.13	-0.19
Sortino ratio Return per unit of downside risk	2.69	2.94	-0.24
Omega ratio Gain probability vs. loss probability	1.36	1.39	-0.03
Calmar ratio Return relative to maximum drawdown	2.76	2.85	-0.08
Martin ratio Return relative to average drawdown	9.96	11.06	-1.10
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VWO vs. VEU - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 1.94, which is comparable to the VEU Sharpe Ratio of 2.13. The chart below compares the historical Sharpe Ratios of VWO and VEU, 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

	VWO	VEU	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.94	2.13	-0.19
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.30	0.54	-0.24
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.46	0.58	-0.12
Sharpe Ratio (All Time) Calculated using the full available price history	0.27	0.25	+0.01

Drawdowns

VWO vs. VEU - Drawdown Comparison

The maximum VWO drawdown since its inception was -67.68%, which is greater than VEU's maximum drawdown of -61.52%. Use the drawdown chart below to compare losses from any high point for VWO and VEU.

Drawdown Indicators

	VWO	VEU	Difference
Max Drawdown Largest peak-to-trough decline	-67.68%	-61.52%	-6.16%
Max Drawdown (1Y) Largest decline over 1 year	-11.17%	-11.43%	+0.26%
Max Drawdown (3Y) Largest decline over 3 years	-17.37%	-13.69%	-3.68%
Max Drawdown (5Y) Largest decline over 5 years	-32.64%	-29.31%	-3.33%
Max Drawdown (10Y) Largest decline over 10 years	-36.39%	-34.98%	-1.41%
Current Drawdown Current decline from peak	-1.41%	-0.98%	-0.43%
Average Drawdown Average peak-to-trough decline	-15.82%	-13.13%	-2.69%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.09%	2.93%	+0.16%

Volatility

VWO vs. VEU - Volatility Comparison

Vanguard FTSE Emerging Markets ETF (VWO) and Vanguard FTSE All-World ex-US ETF (VEU) have volatilities of 5.61% and 5.59%, 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	VEU	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.61%	5.59%	+0.02%
Volatility (6M) Calculated over the trailing 6-month period	13.22%	13.04%	+0.18%
Volatility (1Y) Calculated over the trailing 1-year period	15.89%	15.29%	+0.60%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.37%	16.07%	+1.30%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.20%	17.21%	+1.99%

VWO vs. VEU - Expense Ratio Comparison

VWO has a 0.08% expense ratio, which is higher than VEU's 0.04% 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. VEU - Dividend Comparison

VWO's dividend yield for the trailing twelve months is around 2.40%, less than VEU's 2.61% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEU Vanguard FTSE All-World ex-US ETF	2.61%	3.09%	3.24%	3.32%	3.12%	3.08%	2.00%	3.10%	3.27%	2.66%	2.96%	2.95%
VWO Vanguard FTSE Emerging Markets ETF	2.40%	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 VEU in my portfolio?

VWO and VEU have a correlation of 0.88, 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 VEU?

VWO has higher volatility (5.61%) compared to VEU (5.59%). In terms of maximum drawdown, VWO dropped -67.68% vs VEU's -61.52%.

Which ETF is better, VWO or VEU?

On 10-year performance, VEU leads with 9.94% vs 8.85% for VWO. On fees, VEU is cheaper at 0.04% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VWO or VEU?

Over the 10-year period, VEU has performed better with a 9.94% return vs 8.85%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VWO or VEU?

VEU is cheaper with a 0.04% expense ratio, compared with 0.08% for VWO.

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

VEU has the higher dividend yield at 2.61%, compared with 2.40% for VWO.

What is the main difference between VWO and VEU?

VWO is categorized as Emerging Markets Equities, while VEU is Foreign Large Cap Equities. VWO tracks FTSE Emerging Index, while VEU tracks FTSE All-World ex US Index. Their fees differ too: 0.08% for VWO and 0.04% for VEU.

Which has better risk-adjusted returns?

VEU currently has the higher Sharpe Ratio (2.13 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.