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VWO: Simple Emerging Markets ETF, Compelling Valuation And Growth


  • Emerging market equities offer investors cheap valuations, strong growth prospects, and potential market-beating returns.
  • VWO is a particularly simple, cheap, and effective emerging market equities index ETF.
  • An overview of the fund follows.
  • This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More »

BRICS economy and policies concept : Flags of BRICS or group of five major emerging national economy i.e Brazil, Russia, India, China, South Africa. BRICS members are all leading developing countries.

William_Potter/iStock via Getty Images

Author's note: This article was released to CEF/ETF Income Laboratory members on November 22nd, 2021.

Emerging market equities offer investors comparatively cheap valuations, due to bearish market sentiment, and due to the sky-high valuations sported by most

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This article was written by

Juan de la Hoz profile picture

Juan de la Hoz has worked as a fixed income trader, financial analyst, operations analyst, and as an economics professor. He has experience analyzing, trading, and negotiating fixed-income securities, including bonds, money markets, and interbank trade financing, across markets and currencies. He focuses on dividend, bond, and income funds, with a strong focus on ETFs.

Juan is a contributor to the investing group CEF/ETF Income Laboratory holdings are also monthly-payers, for faster compounding and steady income streams. Other features include 24/7 chat, and trade alerts.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

EM will have its day. The valuation gap would suggest it's a good time to buy now. It's all part of a diversified portfolio. Another one I like is VTRIX. (Vanguard Int'l Value Index Fund). I would take the bet that VWO outperforms SPY in 2022.
Investing in China is too big of risk.
When comparing VWO to (e.g.) SPY or QQQ over the past decades, and in shorter time periods, VWO is a large laggard.
Juan de la Hoz profile picture
@A-ASTON, definitely! But the question is, will that remain the case? Valuations for US equities are streched, growth is accelerating in emerging markets, rates are going to go up next year. I think emerging markets are likelier to outperform next year than not, although I do understand that it is a tough prediction to make considering consistent emerging markets underperformance.
@Juan de la Hoz

Until the pandemic ceases to exist it would appear that emerging markets will continue to take more of the brunt of it and thus continue to lag the U.S. and other developed markets.
@A-ASTON This is to a large part due to index fund investing. No matter the price, no matter the valuation, plow your money into the likes of AAPL, MSFT and NVDA. See it all too often with my friends. Just go for the household names. And it works. Until, one day, it will not. No one knows when that will be.
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