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VOO vs. EMB: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between VOO and EMB? And which fund is better?

The expense ratio of VOO is 0.36 percentage points lower than EMB’s (0.03% vs. 0.39%). VOO also has a high exposure to the technology sector while EMB is mostly comprised of BBB bonds. Overall, VOO has provided higher returns than EMB over the past ten years.

In this article, we’ll compare VOO vs. EMB. We’ll look at risk metrics and annual returns, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss VOO’s and EMB’s fund composition, performance, and industry exposure and examine how these affect their overall returns.

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Summary

VOOEMB
NameVanguard S&P 500 ETFiShares J.P. Morgan USD Emerging Markets Bond ETF
CategoryLarge BlendEmerging Markets Bond
IssuerVanguardiShares
AUM753.41B19.76B
Avg. Return14.45%6.43%
Div. Yield1.34%3.85%
Expense Ratio0.03%0.39%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.

VOO’s dividend yield is 2.51% lower than that of EMB (1.34% vs. 3.85%). Also, VOO yielded on average 8.01% more per year over the past decade (14.45% vs. 6.43%). The expense ratio of VOO is 0.36 percentage points lower than EMB’s (0.03% vs. 0.39%).

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Fund Composition

Holdings

VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

EMB - Holdings

EMB Bond SectorsWeight
BBB33.79%
B21.97%
BB16.92%
A13.67%
AA7.97%
Below B4.49%
Others1.11%
AAA0.09%
US Government0.0%

EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.

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Performance

Annual Returns

VOO vs. EMB - Annual Returns

YearVOOEMB
202018.35%5.48%
201931.46%15.57%
2018-4.42%-5.67%
201721.78%9.98%
201611.93%9.41%
20151.35%0.43%
201413.63%6.69%
201332.33%-7.42%
201215.98%17.64%
20112.09%7.2%
20100.0%11.47%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.

Portfolio Growth

VOO vs. EMB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$36,57514.45%
EMB$10,000$17,3096.43%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in EMB, the end total would have been $17,309. This equates to a $7,309 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.

VOO’s CAGR is 8.01 percentage points higher than that of EMB and as a result, would have yielded $19,266 more on a $10,000 investment. Thus, VOO outperformed EMB by 8.01% annually.


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