Investors looking for ways to take advantage of growing market opportunities in other parts of the wold don’t have to settle on just one region. Instead, with the Vanguard FTSE Emerging Markets ETF (NYSEArca:VWO), they can gain exposure to many emerging markets, including China, Brazil and other regions as well.
However, Vanguard does note that the fund is ideal for long-term investors. While there may be significant rewards that come with investing in these different parts of the world, there’s also significant risk as well, and so it may not be suitable for all types of investors.
The ETF has been very volatile, and while it is up more than 6% this year, over the past five it has declined by 2%. However, it also pays investors a dividend, which is currently averaging around 2.7% but can fluctuate, especially given the different currencies involved and foreign exchange impacts.
There are more than 4,700 stocks that are held in the ETF with the 10 largest holdings making up a little more than 20% of the total. The top two holdings are Tencent Holdings Ltd and Alibaba Group Holdings Ltd (NYSE:BABA). The fund has an expense ratio of 0.12% and is competitive with other ETFs.
Although the ETF hasn’t produced significant results thus far, this could become a very long-term play. For investors that are willing to buy and hold for many years, it is one way to help diversify your portfolio and to benefit from growth in other parts of the world, without having to narrow in on any one country or even continent.
