Which Is the Better International ETF, Vanguard's VWO Targeting Emerging Markets or State Street's Climate Change-Focused NZAC?
NZAC delivered 19% higher returns over five years despite a higher expense ratio. VWO offers lower costs and stronger near-term performance.
Overview
Investors choosing between the State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) and Vanguard FTSE Emerging Markets ETF (NYSEMKT:VWO) are weighing a global strategy focused on climate transition against a low-cost, traditional bet on developing economies.
While both funds provide international equity exposure, their mandates differ significantly. VWO focuses strictly on emerging markets, such as China and Taiwan, to capture growth in developing nations. In contrast, NZAC selects global companies from both developed and emerging markets based on their alignment with climate goals and the reduction of physical climate risks.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.