In terms of performance, the emerging market funds are barely positive for 2012 and trailing the S&P 500, although some investors are bullish on developing markets judging by VWO’s massive inflows. It’s not clear whether the buying reflects investors rotating from EEM into the lower-fee VWO.
Earlier this year, Vanguard cut VWO’s expense ratio by 2 basis points to 0.2%.
Year to date, EEM has gathered net inflows of $693 million, according to the ETF Industry Association.
In 2011, investors pulled $8.5 billion from EEM, while VWO recorded net inflows of $5.3 billion last year.
Vanguard MSCI Emerging Markets
