Want to Add Instant Diversification to Your Portfolio? Here's How VT and VWO Stack Up.
VT holds more than 10,000 stocks across global markets while VWO focuses on more than 6,000 emerging-market holdings. VT delivered stronger five-year returns despite a lower dividend yield.
Overview
While Vanguard FTSE Emerging Markets ETF (NYSEMKT:VWO) provides concentrated exposure to developing economies, Vanguard Total World Stock ETF (NYSEMKT:VT) offers a more comprehensive global strategy including domestic and international stocks.
Investors choosing between these two Vanguard funds are essentially deciding between targeted growth potential in developing economies and broad-based global stability. While Vanguard FTSE Emerging Markets ETF focuses exclusively on nations such as China, Brazil, and Taiwan, Vanguard Total World Stock ETF covers nearly every investable market on the planet, including large caps within the United States.
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
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Originally published at www.fool.com.