VWO vs EEM Stock Comparison: AI Score, Valuation, Performance and Upside
VWO and EEM both provide emerging market equity exposure but differ in index provider (FTSE vs MSCI), Korea exposure (VWO excludes Korea; EEM includes it), cost (VWO is 0.08% vs EEM's 0.70%), and liquidity (EEM is more liquid with deeper options access). The key decision factor is whether an investor needs Korea exposure (EEM) or maximum cost efficiency (VWO).
VWO vs EEM is a cost-versus-benchmark alignment choice with a significant Korean equity exposure difference — VWO is the right long-term vehicle for cost-conscious passive investors, while EEM is the right vehicle for institutional investors benchmarked to MSCI EM or those who want Korean tech company exposure.
VWO holds the edge across 4 of 5 key metrics in this comparison. EEM has delivered stronger 1-year price return (+54.88% vs +29.89% for VWO).
- →prefer the lowest cost emerging market ETF (0.08%) for long-term buy-and-hold passive exposure
- →are comfortable excluding South Korea and the Korean tech companies Samsung and SK Hynix
- →value Vanguard's ownership structure and cost minimization philosophy for long-term wealth building
- →want small-cap emerging market exposure included alongside large and mid-cap names
- →prefer the most liquid emerging market ETF with the deepest options market for institutional hedging
- →value South Korea inclusion for exposure to Samsung, SK Hynix, and Korean semiconductor and consumer electronics companies
- →want alignment with the MSCI EM benchmark used by institutional managers for performance measurement
- →are comfortable paying 0.70% expense ratio for maximum liquidity and benchmark alignment
| Metric | VWO | EEM |
|---|---|---|
| ETF score | 83.0 | 59.0 |
| Latest close | $60.77 | $70.79 |
| 1M return | +5.14% | +10.73% |
| 6M return | +16.77% | +35.28% |
| 1Y return | +29.89% | +54.88% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | VWO | EEM |
|---|---|---|
| 1Y ago | $13.37K (+33.7%) started 2025-06-18 | $15.79K (+57.9%) started 2025-06-18 |
| 5Y ago | $15.83K (+58.3%) started 2021-06-18 | $16.63K (+66.3%) started 2021-06-18 |
| 10Y ago | $32.79K (+227.9%) started 2016-06-20 | $33.81K (+238.1%) started 2016-06-20 |
Hypothetical — past performance does not guarantee future results.
| Metric | VWO | EEM |
|---|---|---|
| Expense ratio | 0.06% | 0.72% |
| Total assets (AUM) | $162.82B | $30.33B |
| Dividend yield | 2.43% | 1.77% |
| Trailing P/E | 17.16 | 18.74 |
| Beta | 0.62 | 0.74 |
| 52-week change | 29.89% | 54.88% |
| Metric | VWO | EEM |
|---|---|---|
| 1Y return | +29.89% | +54.88% |
| 6M return | +16.77% | +35.28% |
| 1M return | +5.14% | +10.73% |
| 1Y Sharpe ratio | 1.39 | 1.90 |
| Beta | 0.62 | 0.74 |
| Dividend yield | 2.43% | 1.77% |
| 5Y CAGR | +5.88% | +7.98% |
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | VWO | EEM |
|---|---|---|---|
| 1Y | Growth | +29.89% | +54.88% |
| CAGR | +29.91% | +54.93% | |
| Sharpe ratio | 1.39 | 1.90 | |
| Max drawdown | 11.17% | 13.52% | |
| Max daily drop | 3.78% | 6.53% | |
| Max wkly drop | 6.25% | 8.41% | |
| 5Y | Growth | +33.04% | +46.82% |
| CAGR | +5.88% | +7.98% | |
| Sharpe ratio | 0.16 | 0.26 | |
| Max drawdown | 32.60% | 37.49% | |
| Max daily drop | 5.60% | 6.53% | |
| Max wkly drop | 12.16% | 12.14% | |
| 10Y | Growth | +135.75% | +162.34% |
| CAGR | +8.96% | +10.13% | |
| Sharpe ratio | 0.31 | 0.35 | |
| Max drawdown | 36.39% | 39.82% | |
| Max daily drop | 12.09% | 12.48% | |
| Max wkly drop | 17.93% | 17.72% |
| Category | VWO | EEM |
|---|---|---|
| Fund name | Vanguard Emerging Markets Stock Index Fund | iShares MSCI Emerging Markets ETF |
| Type | ETF | ETF |
| Expense ratio | 0.06% | 0.72% |
| Total assets (AUM) | $162.82B | $30.33B |
| Dividend yield | 2.43% | 1.77% |
- →0.08% expense ratio is dramatically cheaper than EEM's 0.70%, saving significant costs over multi-year holding periods
- →Includes small-cap emerging market companies for broader emerging market coverage
- →Vanguard ownership structure ensures no conflicts of interest in fund management
- →Includes South Korea (Samsung, SK Hynix), which is excluded from VWO — provides exposure to one of Asia's most important technology markets
- →Most liquid emerging market ETF with deep options market — essential for institutional hedging and portfolio overlays
- →Alignment with the MSCI EM benchmark, used by nearly all institutional emerging market managers globally
- →Excludes South Korea entirely (FTSE classifies Korea as developed), missing Samsung, SK Hynix, and other major Korean companies
- →FTSE vs MSCI methodology difference means VWO and EEM can diverge significantly in performance during periods of Korean equity market stress or strength
- →Smaller AUM and lower daily trading volume than EEM, leading to wider bid-ask spreads for large trades
- →0.70% expense ratio is nearly 9x more expensive than VWO's 0.08%, a massive cost difference for long-term investors
- →Higher trading costs make EEM a poor buy-and-hold vehicle despite its liquidity advantages for active traders
- →Korea's classification as an emerging market by MSCI is an ongoing debate — if MSCI upgrades Korea to developed status, EEM's composition would change significantly
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