- With China and Hong Kong stocks making up 37% of the Vanguard FTSE Emerging Markets ETF (VWO), it is no surprise that the index has underperformed to such a degree.
- The VWO's underlying FTSE Emerging Markets index trades at roughly half of the valuation of the S&P500, despite a stronger outlook for real GDP growth.
- With sentiment towards China and EMs in the basement at present amid the sea of negative headlines, it is noteworthy that the VWO has managed to post a higher low.
- The distribution yield is currently 2.25% versus the EEM's 1.48%, but if Bloomberg estimates are to be believed, this should rise to around 2.9% over the next year (absent any price changes) as dividends recover strongly.
For further details see:
VWO: China Risks May Be Priced In