VGSH vs VWO
Vanguard Short Term Treasury ETF vs Vanguard FTSE Emerging Markets ETF
Quick Verdict
VGSH has a lower expense ratio. VWO delivered stronger 1-year returns. VWO offers more diversification with 6,334 holdings.
Side-by-Side Comparison
| Metric | VGSH | VWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.06% | |
| AUM | $34.7B | $122.0B | |
| Dividend Yield | 3.85% | 2.39% | |
| Holdings | 94 | 6,334 | |
| YTD Return | +1.11% | +10.18% | |
| 1Y Return | +2.94% | +20.99% | |
| 3Y Return (annualized) | +4.40% | +18.45% | |
| 5Y Return (annualized) | +1.96% | +7.14% | |
| Volatility (annualized) | 1.4% | 20.1% | |
| Max Drawdown | -6.7% | -68.3% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | Mar 4, 2005 |
VGSH vs VWO Performance
Vanguard Short Term Treasury ETF (VGSH) is a ETF from Vanguard (US) and Vanguard FTSE Emerging Markets ETF (VWO) is a ETF from Vanguard (US). Over the past year VGSH returned +2.94% while VWO returned +20.99%. Year to date, VGSH is up 1.11% versus a gain of 10.18% for VWO.
Over three years, VGSH compounded at +4.40% per year against +18.45% for VWO; over five years the annualized figures are +1.96% and +7.14% respectively. Across the full 17-year window we track, VWO has the edge at +4.98% annualized vs +0.73%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VWO has been the more volatile fund, with annualized monthly volatility of 20.1% compared with 1.4% for VGSH. 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 -6.7% for VGSH 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 0.08. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGSH charges 0.03% per year while VWO charges 0.06%. On a $10,000 position that is $3 vs $6 annually, a gap of $3 per year that compounds over a long holding period. On income, VGSH currently yields 3.85% against 2.39% for VWO.
Holdings Overlap
VGSH and VWO share 0 holdings out of 4000 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VGSH or VWO?
VGSH has an expense ratio of 0.03% while VWO charges 0.06%. VGSH is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, VGSH or VWO?
Over the past year VGSH returned +2.94% vs +20.99% for VWO, so VWO leads on 1-year performance. Over the longest common window we track (17 years), VGSH annualized +0.73% vs +4.98% for VWO. Past performance does not guarantee future results.
Which is riskier, VGSH or VWO?
VWO has been the more volatile fund at 20.1% annualized versus 1.4% for VGSH. Worst drawdown: VGSH -6.7% vs VWO -68.3%.
Should I hold both VGSH and VWO?
VGSH and VWO have a monthly-return correlation of 0.08, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGSH and VWO?
VGSH and VWO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4000 unique securities.
Which pays a higher dividend, VGSH or VWO?
VGSH yields 3.85% while VWO yields 2.39%, so VGSH currently pays the higher dividend yield.
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