VBR vs VWO
Vanguard Morningstar Small-Cap Value ETF vs Vanguard FTSE Emerging Markets ETF
Quick Verdict
VBR has a lower expense ratio. VWO delivered stronger 1-year returns. VWO offers more diversification with 6,334 holdings.
Side-by-Side Comparison
| Metric | VBR | VWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.06% | |
| AUM | $37.3B | $122.0B | |
| Dividend Yield | 1.76% | 2.39% | |
| Holdings | 847 | 6,334 | |
| YTD Return | +15.68% | +10.76% | |
| 1Y Return | +20.63% | +21.18% | |
| 3Y Return (annualized) | +16.31% | +17.82% | |
| 5Y Return (annualized) | +9.20% | +6.17% | |
| Volatility (annualized) | 19.0% | 20.0% | |
| Max Drawdown | -64.0% | -68.3% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Mar 4, 2005 |
VBR vs VWO Performance
Vanguard Morningstar Small-Cap Value ETF (VBR) is a ETF from Vanguard (US) and Vanguard FTSE Emerging Markets ETF (VWO) is a ETF from Vanguard (US). Over the past year VBR returned +20.63% while VWO returned +21.18%. Year to date, VBR is up 15.68% versus a gain of 10.76% for VWO.
Over three years, VBR compounded at +16.31% per year against +17.82% for VWO; over five years the annualized figures are +9.20% and +6.17% respectively. Across the full 22-year window we track, VBR has the edge at +7.91% annualized vs +5.00%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VWO has been the more volatile fund, with annualized monthly volatility of 20.0% compared with 19.0% for VBR. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -64.0% for VBR and -68.3% for VWO. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.69. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VBR charges 0.05% per year while VWO charges 0.06%. On a $10,000 position that is $5 vs $6 annually, a gap of $1 per year that compounds over a long holding period. On income, VBR currently yields 1.76% against 2.39% for VWO.
Holdings Overlap
VBR and VWO share 1 holdings out of 5530 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VBR | Weight in VWO | Difference |
|---|---|---|---|
| EGP | 0.23% | 0.00% | 0.23% |
Frequently Asked Questions
Which is cheaper, VBR or VWO?
VBR has an expense ratio of 0.05% while VWO charges 0.06%. VBR is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VBR or VWO?
Over the past year VBR returned +20.63% vs +21.18% for VWO, so VWO leads on 1-year performance. Over the longest common window we track (22 years), VBR annualized +7.91% vs +5.00% for VWO. Past performance does not guarantee future results.
Which is riskier, VBR or VWO?
VWO has been the more volatile fund at 20.0% annualized versus 19.0% for VBR. Worst drawdown: VBR -64.0% vs VWO -68.3%.
Should I hold both VBR and VWO?
VBR and VWO have a monthly-return correlation of 0.69, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VBR and VWO?
VBR and VWO share 1 common holdings with a 0.0% weight overlap. Combined, they hold 5530 unique securities.
Which pays a higher dividend, VBR or VWO?
VBR yields 1.76% while VWO yields 2.39%, so VWO currently pays the higher dividend yield.
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