VWO vs. VEU

Last updated Aug 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 7.69%/yr vs 9.63%/yr for VEU. Their correlation of 0.88 means they have usually moved in the same direction. 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 9.99% return, which is significantly lower than VEU's 13.83% return. Over the past 10 years, VWO has underperformed VEU with an annualized return of 7.69%, while VEU has yielded a comparatively higher 9.63% annualized return.

VWO

• 1D: 0.53%
• 1M: 0.03%
• 6M: 4.14%
• YTD: 9.99%
• 1Y: 22.33%
• 3Y*: 15.67%
• 5Y*: 5.92%
• 10Y*: 7.69%
• ALL TIME*: 6.83%

VEU

• 1D: 0.45%
• 1M: 0.29%
• 6M: 7.13%
• YTD: 13.83%
• 1Y: 28.98%
• 3Y*: 18.48%
• 5Y*: 9.01%
• 10Y*: 9.63%
• ALL TIME*: 5.48%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
VEU Vanguard FTSE All-World ex-US ETF	$232.81M	$239.63M	$222.48M
VWO Vanguard FTSE Emerging Markets ETF	$402.91M	$469.57M	$503.00M

VWO vs. VEU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWO Vanguard FTSE Emerging Markets ETF	9.99%	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	13.83%	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 0.89, meaning they have usually moved in the same direction, including during past declines.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.89
Correlation (3Y) Balances recent behavior with more history.	0.87
Correlation (5Y) Shows whether the relationship held over a longer period.	0.88
Correlation (10Y) Provides a long-term view across more market conditions.	0.88
Correlation (All Time) Calculated using the full available price history since Mar 8, 2007	0.88

The correlation between VWO and VEU has been stable across timeframes, ranging from 0.87 to 0.89 - a consistent structural relationship.

VWO vs. VEU - Sectors Allocation Comparison

Sectors	VWO	VEU
Technology	34.2%	23.2%
Financial Services	19.4%	23.1%
Consumer Cyclical	9.1%	7.6%
Industrials	7.9%	14.7%
Basic Materials	7.2%	6.5%
Communication Services	6.6%	4.2%
Energy	3.8%	4.3%
Healthcare	3.7%	6.8%
Consumer Defensive	3.3%	4.9%
Utilities	2.8%	3.0%
Real Estate	2.0%	1.8%

Return for Risk

VWO vs. VEU — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

VWO

VWO Risk / Return Rank: 52
VWO Sharpe Ratio Rank: 51
VWO Sortino Ratio Rank: 50
VWO Omega Ratio Rank: 51
VWO Calmar Ratio Rank: 55
VWO Martin Ratio Rank: 54

VEU

VEU Risk / Return Rank: 73
VEU Sharpe Ratio Rank: 74
VEU Sortino Ratio Rank: 73
VEU Omega Ratio Rank: 75
VEU Calmar Ratio Rank: 72
VEU Martin Ratio Rank: 74

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

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.

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	VEU	Difference
Sharpe ratio: Return per unit of total volatility	1.28	1.72	-0.44
Sortino ratio: Return per unit of downside risk	1.81	2.38	-0.57
Omega ratio: Gain probability vs. loss probability	1.23	1.32	-0.08
Calmar ratio: Return relative to maximum drawdown	2.01	2.55	-0.54
Martin ratio: Return relative to average drawdown	6.52	9.31	-2.79

VWO vs. VEU - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 1.28, which is comparable to the VEU Sharpe Ratio of 1.72. 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.

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	-30.88%	-29.14%	-1.74%
Max Drawdown (10Y) Largest decline over 10 years	-36.39%	-34.98%	-1.41%
Current Drawdown Current decline from peak	-3.56%	-2.36%	-1.20%
Average Drawdown Average peak-to-trough decline	-15.73%	-13.04%	-2.69%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.43%	3.12%	+0.31%

Volatility

VWO vs. VEU - Volatility Comparison

Vanguard FTSE Emerging Markets ETF (VWO) has a higher volatility of 5.60% compared to Vanguard FTSE All-World ex-US ETF (VEU) at 5.32%. This indicates that VWO's price experiences larger fluctuations and is considered to be riskier than VEU based on this measure. 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	5.60%	5.32%	+0.28%
Volatility (6M) Calculated over the trailing 6-month period	15.08%	15.02%	+0.06%
Volatility (1Y) Calculated over the trailing 1-year period	17.60%	16.96%	+0.64%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.56%	16.37%	+1.19%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.17%	17.08%	+2.09%

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 2.34%, less than VEU's 2.54% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEU Vanguard FTSE All-World ex-US ETF	2.54%	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	2.34%	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 0.89, 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 (5.60%) compared to VEU (5.32%). 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 9.63% vs 7.69% for VWO. On fees, VEU is cheaper at 0.04% per year. On volatility, VEU has been the lower-risk option at 5.32%. 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 9.63% return vs 7.69%. 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 2.54%, compared with 2.34% 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 (1.72 vs 1.28), 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.