VWO (emerg markets) very disappointing performance

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Mitchell777
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Joined: Mon May 21, 2007 6:32 am

Re: VWO (emerg markets) very disappointing performance

Post by Mitchell777 »

ilan1h wrote: Sat Oct 17, 2020 8:38 pm My asset allocation is calling for more VWO which comprises less than 3% of my portfolio. However, according to portfoliovisualizer this ETF has been underperfoming for almost 13 yrs! The SP500 has beaten it by close to 100% during this time and, even worse, it has been a very rough ride with VWO. Max drawdown of 62%, SD of 22% and worst year of 53%. I think that's one of the most volatile rides I"ve ever seen in any sector.
Is it less than 3% of your total investments? I have owned VWO for some time also. It's only about 1.25% of my total investments (retired and not as heavy in equites as in the past). But it's 6% of my equites and 21.5% of my international equities.
atdharris
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Joined: Wed Jan 02, 2019 3:18 pm

Re: VWO (emerg markets) very disappointing performance

Post by atdharris »

The returns really have been awful, which pretty much tells you that raw economic growth in emerging markets does not necessarily mean the stock markets are growing. You'd think a fund dominated by China would have spectacular returns over the last decade, but alas..
bling
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Joined: Sat Jan 21, 2012 12:49 pm

Re: VWO (emerg markets) very disappointing performance

Post by bling »

i'm hoping the next decade will be different because S&P 500 has made pretty much every other allocation/tilt (ex-US, emerging markets, REITs, small cap value) look terrible.
aptget
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Joined: Thu Jun 29, 2017 2:14 pm

Re: VWO (emerg markets) very disappointing performance

Post by aptget »

atdharris wrote: Mon Oct 19, 2020 11:26 am The returns really have been awful, which pretty much tells you that raw economic growth in emerging markets does not necessarily mean the stock markets are growing. You'd think a fund dominated by China would have spectacular returns over the last decade, but alas..
Can anyone tell me if VWO has increased the percentage of China equities in the past few years? Or has it always been roughly the same? Something tells me it wasn't always "dominated by China..."
absolute zero
Posts: 568
Joined: Thu Dec 29, 2016 4:59 pm

Re: VWO (emerg markets) very disappointing performance

Post by absolute zero »

aptget wrote: Fri Nov 20, 2020 2:39 pm
atdharris wrote: Mon Oct 19, 2020 11:26 am The returns really have been awful, which pretty much tells you that raw economic growth in emerging markets does not necessarily mean the stock markets are growing. You'd think a fund dominated by China would have spectacular returns over the last decade, but alas..
Can anyone tell me if VWO has increased the percentage of China equities in the past few years? Or has it always been roughly the same? Something tells me it wasn't always "dominated by China..."
Back in 2015 VWO was 28% China.
viewtopic.php?p=2728771#p2728771
rj49
Posts: 576
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Re: VWO (emerg markets) very disappointing performance

Post by rj49 »

Buy low, sell high, reversion to the mean, greater risk often means greater reward. Past performance does not guarantee future returns. Look up GMO 7-year asset return forecast--Emerging Markets and Emerging Markets bonds are the only assets forecast to have positive returns (Emerging Value is forecast to have a 9% return, vs -6% for US Large). GMO and Rob Arnott make good cases for owning EM, especially if you believe in buying the least-overpriced assets. EM was outperforming until the collapse in energy and commodity prices (at one point Gazprom was the biggest stock in the index)--before FAANG mania, there was BRIC mania. Don't fall for recency bias.

If you simply invest in total world markets, you'll capture whatever the market thinks EM is worth (William Sharpe advocates such an approach and wrote a good ebook on his Stanford web site about using that approach for retirement investing and withdrawals). Invest in total markets and have a safe income floor to go with it, and you'll stop regretting being overweight or underweight something--you'll always be even weight with what the investing world believes. You won't have to bet on gold or small value or Tesla or high dividend stocks or whatever is temporarily getting everybody excited, and best of all, you'll avoid the interminable and insoluble question of how much to invest in US versus international or stocks vs bonds...you could put everything now into 50% VT and 50% BNDW and own the world's market portfolio in the approximate stock/bond proportions.
YRT70
Posts: 735
Joined: Sat Apr 27, 2019 8:51 am

Re: VWO (emerg markets) very disappointing performance

Post by YRT70 »

VWO is up 9.44% this year. Not bad.

Performance since inception 6.83%.
Anon9001
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Location: भारत

Re: VWO (emerg markets) very disappointing performance

Post by Anon9001 »

VWO is essentially Chinese Equity Fund in that 45% of it is China and 60% if you consider Taiwan to be part of China. Be very careful investing in it and assuming you are getting exposure to emerging markets. You are not. You are getting very high exposure to one country in which rule of law is fiction and minority share-holder rights are close to a joke. I would be even more cautious now as the current leader seems to be a control freak and the country now seems to be resembling other dictatorships in which one man controls everything.
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Forester
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Re: VWO (emerg markets) very disappointing performance

Post by Forester »

Investable emerging markets comfortably ahead of the US;

Since 4th January 1999
EEM +578%
SPY +331%
stimulacra
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Location: Houston

Re: VWO (emerg markets) very disappointing performance

Post by stimulacra »

I hold VEMAX (Emerging Markets) at around 10% in addition to 10% VTIAX (International). I'm aware of the overlap.

When we talk about Emerging Markets, aren't we really talking about the rest of the world that isn't US, Canada, Europe, Japan, South Korea and Australia?

That's why I hold it, geographic diversity. I know for a fact my portfolio today will be worth more had I gone all in on US equities and will probably continue to do so in the short term. I don't know how the next 20-30 years will pan out which is why I do so.
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