Single emerging markets equity fund with broad regional diversification and modest income tilt
Report created on Apr 21, 2026Risk profile
- Secure Speculative
The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.
Diversification profile
- Focused Diversified
The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.
Positions
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VW Vanguard FTSE Emerging Markets Index Fund ETF Shares
VWO - US9220428588 100.00%
This portfolio is built around a single holding: one broad emerging markets equity ETF at 100% weight. That means every dollar is invested in stocks from developing economies through a diversified index fund. Structurally, this is very simple: no bonds, no cash slice, and no satellite positions. A single-fund setup is easy to follow and removes decisions about how to split between multiple products. At the same time, all risk and return come from this one building block. The underlying index is diversified across many companies and countries, but the portfolio’s overall behavior will closely track the ups and downs of emerging markets as an asset class.
Growth
Over the last decade, $1,000 invested in this portfolio grew to about $2,281, for a compound annual growth rate (CAGR) of 8.63%. CAGR is like your average speed on a long road trip, smoothing out all the bumps along the way. Compared with the US and global market benchmarks, this portfolio lagged by 6.18 and 3.57 percentage points per year, respectively. The max drawdown was -36.39%, slightly deeper than the benchmarks’ drops. That drawdown illustrates how emerging markets can be bumpier, taking over two years to bottom and another eight months to recover. As always, past performance shows how it behaved, but doesn’t predict the future.
Projection
The Monte Carlo projection looks at many possible futures using past returns and volatility as a guide. It runs 1,000 simulations and shows a wide range of 15‑year outcomes for a $1,000 starting investment. The median result is around $2,840, with most simulations landing between about $1,823 and $4,232. Monte Carlo doesn’t try to guess a single “right” number; it maps out a spectrum of plausible paths. The fact that roughly three‑quarters of the simulations end positive reflects the historical return premium of stocks, but some simulated paths barely grow at all. These models are educational tools, not promises, and real‑world outcomes can fall outside the ranges.
Asset classes
- Stocks 100%
All of this portfolio is in one asset class: stocks. There is no allocation to bonds, cash, or alternative assets. That creates a very growth‑oriented profile, since equities historically have offered higher expected returns alongside larger swings in value. Having 100% in stocks means the portfolio’s ups and downs will track equity markets more directly, without the cushioning effect bonds can provide in some downturns. On the flip side, there is no drag from lower‑return asset classes in strong equity periods. This concentration in a single asset class is straightforward and transparent, but it also means diversification happens only within the stock market, not across different types of investments.
Sectors
- Technology 26%
- Financials 21%
- Consumer Discretionary 11%
- Basic Materials 9%
- Industrials 8%
- Telecommunications 8%
- Energy 4%
- Health Care 4%
- Consumer Staples 4%
- Utilities 3%
- Real Estate 2%
Sector-wise, the ETF spreads its holdings across many parts of the economy, with technology and financials standing out at 26% and 21%. The rest is distributed among consumer, industrial, materials, telecom, energy, healthcare, staples, utilities, and real estate. This looks like a fairly typical modern stock market mix, where tech and finance often dominate, but the overall spread is broad. Sector diversification matters because different industries respond differently to interest rates, regulation, and economic cycles. For example, tech‑heavy allocations can be more sensitive to changes in growth expectations, while financials can react strongly to rate moves. This portfolio’s sector spread supports internal diversification within emerging markets.
Regions
- Asia Emerging 51%
- Asia Developed 27%
- Africa/Middle East 10%
- Latin America 8%
- Europe Emerging 2%
- North America 1%
- Europe Developed 1%
Geographically, the portfolio is very focused on emerging economies, with over half in emerging Asia and additional exposure to Latin America, Africa/Middle East, and emerging Europe. There is only a small slice in developed regions and North America. This is a clear tilt away from global benchmarks that are dominated by developed markets. Geographic exposure matters because returns are tied to local growth, politics, currencies, and regulation. Concentrating in emerging regions can offer higher growth potential but also greater sensitivity to local shocks or policy changes. The broad spread across different emerging areas helps, yet the overall outcome will still be heavily driven by conditions in developing Asian markets.
Market capitalization
- Mega-cap 46%
- Large-cap 29%
- Mid-cap 16%
- Small-cap 4%
- Micro-cap 1%
Some holdings may not have full classification data available. Percentages may not add up to 100%.
By market capitalization, the portfolio leans toward the larger end of the spectrum: about 46% in mega‑caps and 29% in large‑caps, with the remainder in mid, small, and micro‑caps. Market cap describes a company’s size in the stock market, and size can affect risk and return behavior. Larger companies often have more stable businesses and better access to financing, which can mean somewhat smoother performance than very small firms. Smaller companies may offer more growth potential but can swing more dramatically. This portfolio still includes the full range, but the heavy weighting to bigger names suggests its behavior will be closer to broad market movements rather than dominated by tiny, more volatile stocks.
True holdings
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23 Taiwan Semiconductor Manufacturing Co. Ltd. 12.81%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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07 Tencent Holdings Ltd 3.56%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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99 Alibaba Group Holding Ltd 2.56%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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RE Reliance Industries Limited 0.89%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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09 China Construction Bank Corp 0.86%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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HD HDFC Bank Limited 0.81%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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23 Delta Electronics Inc 0.79%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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PD PDD Holdings Inc. 0.71%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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23 Hon Hai Precision Industry Co Ltd 0.68%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
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18 Xiaomi Corp 0.65%
Part of fund(s):- Vanguard FTSE Emerging Markets Index Fund ETF Shares
- Top 10 total 24.32%
Looking through the ETF to its top holdings, a few companies stand out. Taiwan Semiconductor alone accounts for about 12.8% of the portfolio, while Tencent and Alibaba add another roughly 6%. The rest of the top‑10 names are under 1% each. Because these top names are held only via the ETF, there is no double‑counting from separate direct positions, which keeps the picture clean. The relatively high weight in a single company means its news and earnings can noticeably move the portfolio. At the same time, only about a quarter of total holdings are visible in this top‑10 snapshot, so underlying diversification is broader than these names alone suggest.
Factors
On investment factors, the portfolio looks mostly market‑like, with neutral tilts to value, size, quality, and low volatility. Factor exposure is like checking which “personality traits” drive returns: value, momentum, quality, and so on. The two notable signals here are low momentum (38%) and higher yield (65%). Low momentum means the portfolio leans slightly away from the stocks that have recently been the strongest performers, which can lag in strong trending markets but may help in sharp reversals. The elevated yield tilt reflects a bias toward companies paying more in dividends. That can modestly steady returns through income, but dividend‑oriented stocks can behave differently from pure growth names in certain cycles.
Risk contribution
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Vanguard FTSE Emerging Markets Index Fund ETF Shares
Weight: 100.00% 100.0%
Risk contribution shows how much each holding drives overall ups and downs. Here it’s simple: with one ETF at 100% weight, it also contributes 100% of the portfolio’s risk. In more complex portfolios, a small but volatile position can add a lot of risk, like one loud instrument dominating an orchestra. In this case, there is no internal offset between different funds or asset classes. All risk management happens inside the ETF’s own diversification and index rules. That simplicity makes it easy to see what the main risk driver is—emerging markets equity—but it also means there’s no secondary anchor in the portfolio to behave differently during rough periods.
Dividends
- Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.50%
- Weighted yield (per year) 2.50%
The ETF’s dividend yield is about 2.50%, so a noticeable slice of total return has come from income, not just price changes. Dividends are cash payments companies make to shareholders, and reinvesting them can meaningfully boost long‑term growth through compounding. For this portfolio, the yield tilt seen in the factor data lines up with a modestly above‑cash income stream, especially compared with today’s short‑term interest rates assumption in the projection. Dividend levels can change as companies update their policies or as prices move, so this figure isn’t fixed, but it suggests that income has been and may remain a meaningful component of the overall return profile.
Ongoing product costs
- Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
- Weighted costs total (per year) 0.08%
The total expense ratio (TER) for the ETF is 0.08%, which is very low by industry standards. TER is the annual fee charged by the fund manager, taken directly out of the fund’s assets, so you never see a separate bill but it quietly reduces returns each year. Keeping costs low is one of the few things investors can reliably control, and low costs leave more of the market’s return in the portfolio. This fee level is competitive with other broad index trackers and aligns well with cost‑efficient, long‑term investing practices. Over long horizons, even small fee differences can compound into meaningful dollar amounts.
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