Looking to Expand Your Portfolio's Global Diversity? These ETFs May Help

Core Insights - The article compares two international ETFs: Vanguard FTSE Emerging Markets ETF (VWO) and iShares MSCI ACWI ex U.S. ETF (ACWX), highlighting their differing focuses on emerging markets versus a broader global diversification strategy [2] Cost and Size Comparison - VWO has a significantly lower expense ratio of 0.07% compared to ACWX's 0.32% [3][4] - As of January 25, 2026, VWO's one-year return is 28.53%, while ACWX's is 31.86% [3] - Both ETFs offer similar dividend yields, with VWO at 2.64% and ACWX at 2.7% [3] - VWO has assets under management (AUM) of $112.62 billion, significantly larger than ACWX's $8.53 billion [3] Performance and Risk Comparison - Over the past five years, VWO experienced a maximum drawdown of -34.31%, while ACWX had a drawdown of -30.06% [5] - An investment of $1,000 in VWO would have grown to $1,069 over five years, compared to $1,267 for ACWX [5] Portfolio Composition - ACWX, launched nearly 18 years ago, holds 1,796 companies across developed and emerging markets, with a focus on financial services, industrials, and technology [6] - The largest positions in ACWX include Taiwan Semiconductor Manufacturing Co., Tencent Holdings Ltd., and ASML Holding N.V. [6] - VWO is concentrated in emerging markets, with significant investments in technology, financial services, and consumer cyclical sectors, including major stakes in Taiwan Semiconductor, Tencent, and Alibaba Group [7] - TSMC alone constitutes over 10% of VWO's assets, indicating a higher concentration and potential volatility compared to ACWX [7] Dividend Payment Structure - ACWX pays dividends semi-annually, while VWO pays dividends quarterly, which may influence investor preferences regarding cash flow [10]