VWO vs VXUS: Which ETF Is Better in 2026?
A metric-by-metric comparison of Vanguard Emerging Markets Stock Index Fund (VWO) and Vanguard Total International Stock Index Fund ETF Shares (VXUS) — both Emerging Markets / Global Multi-Region funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
VWO (Emerging Markets) and VXUS (Global Multi-Region) sit in different corners of the market, so this is less a head-to-head than a question of what role each would play. They can be complements rather than alternatives — the metrics below show how differently the two have actually behaved.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VXUS scores higher: 76.5 (Grade B+) versus 65.5 for VWO. That doesn't make VWO a bad fund; it means VXUS currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| VWO | VXUS | |
|---|---|---|
| Category | Emerging Markets | Global Multi-Region |
| Expense ratio | 0.06% | 0.05% |
| Fund size (AUM) | $163.3B | $650.3B |
| Dividend yield | 1.93% | 2.56% |
| 1-year return | +15.78% | +20.76% |
| 3-year return | +46.95% | +56.94% |
| Volatility | 17.38% | 16.66% |
| Max drawdown | -17.37% | -13.58% |
| Sharpe ratio | 0.62 | 0.95 |
| ETFValuer score | 65.5 | 76.5 |
| Grade | B | B+ |
| Overall rank | #164 | #32 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — VWO charges 0.06% a year versus VXUS's 0.05%. A difference this small (about $1.00 a year on a $10,000 position) isn't a reason to choose one fund over the other.
What VWO's Fees Cost You
VWO charges an expense ratio of 0.06% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, VXUS returned +56.94% versus +46.95% for VWO — a gap of about 10.0 percentage points. On risk, VXUS has held up better historically, with a shallower max drawdown (-13.58% vs. -17.37%). VXUS currently has the better risk-adjusted return (Sharpe ratio of 0.95 vs. 0.62), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), VWO and VXUS show a high correlation of 0.907 — closely related, but not identical. Holding both would add very little diversification: when one falls, the other almost always falls with it. Treat these as alternatives to each other, not as complements in the same portfolio.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.907 | High — closely related, but not identical |
| R-squared | 82.2% | 82.2% of VWO's daily moves are explained by VXUS's |
| Tracking error (annualised) | 6.98% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | VWO +14.50% · VXUS +16.64% | VXUS ahead by 2.14 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, VWO finished as much as +7.4 points ahead of VXUS at the best extreme and -8.3 points at the worst — a 15.7-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
VWO and VXUS hold 4 of the same companies among their top 10 positions. Those shared names make up 24.7% of VWO and 8.0% of VXUS. That's meaningful duplication. The funds aren't interchangeable, but a good share of your money would be riding on the same companies twice.
| Shared Holding | VWO Weight | VXUS Weight |
|---|---|---|
| Taiwan Semiconductor Manufacturing Co Ltd | 14.61% | 3.93% |
| Vanguard Cmt Funds-Vanguard Market Liquidity Fund | 4.28% | 2.48% |
| Tencent Holdings Ltd | 3.26% | 0.87% |
| Alibaba Group Holding Ltd | 2.55% | 0.69% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean VWO if…
- You have no strong preference — VWO is a perfectly reasonable default here
Lean VXUS if…
- You want the lower running cost — 0.05% vs 0.06%, about $1 a year less on a $10,000 position
- Current income matters to you — it yields 2.56% against 1.93%
- You care about return per unit of risk — its Sharpe ratio of 0.95 beats 0.62
- You weight recent results heavily — it returned 56.9% over 3 years against 47.0%
These two are not really substitutes, so "both, in some proportion" is often the right answer rather than picking one. Model the blend with the Portfolio Blender.
Frequently Asked Questions
Is VWO or VXUS better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VXUS scores higher: 76.5 (Grade B+) versus 65.5 for VWO. That doesn't make VWO a bad fund; it means VXUS currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, VWO or VXUS?
VXUS currently has the lower expense ratio (0.05% vs. 0.06%).
Can I hold both VWO and VXUS?
You can, though the benefit is limited. At a correlation of 0.91, VWO and VXUS fall together far more often than not, so owning both adds complexity and a second expense ratio without much real diversification. Most investors are better served picking one.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.