In this article, we discuss 5 best Vanguard ETFs to invest in. If you want our detailed analysis of these ETFs, go directly to 10 Best Vanguard ETFs to Invest In.
5. Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO)
Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO) closely tracks the returns of the FTSE Emerging Markets All Cap China A Inclusion Index, investing in companies located in emerging markets around the world, such as China, Brazil, Taiwan, and South Africa. The exchange traded fund owns 5,293 stocks in its portfolio, with total net assets equalling $112.0 billion, and a top ten holdings concentration of 21.4%.
A prominent holding of Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO) is Alibaba Group Holding Limited (NYSE:BABA), a Chinese company providing e-commerce, technology infrastructure, and marketing reach to merchants and customers in China and internationally.
On March 3, Baird analyst Colin Sebastian lowered the price target on Alibaba Group Holding Limited (NYSE:BABA) to $160 from $180 and kept an Outperform rating on the shares. The analyst stated that the biggest takeaway from the quarter is that Alibaba Group Holding Limited (NYSE:BABA) remains focused on long-term growth despite the near-term macro and competitive headwinds, and he continues to see significant value in the company’s technology oriented e-commerce and cloud services platform.
In Q4 2021, 96 hedge funds were bullish on Alibaba Group Holding Limited (NYSE:BABA), compared to 115 funds in the prior quarter. Fisher Asset Management held the biggest stake in the company, with 14.1 million shares worth $1.68 billion.
Here is what Longleaf Partners International Fund has to say about Alibaba Group Holding Limited (NYSE:BABA) in its Q4 2021 investor letter:
“Alibaba (-50%, -2.26%; -22%, -0.82%), the largest online retail platform in China, was another top detractor for the year and in the fourth quarter. Alibaba reported weak quarterly results and downgraded its sales outlook for the current fiscal year to 20- 23% growth, down from original guidance of 29-32% growth. Macro headwinds, weak consumer sentiment, regulatory scrutiny and competitive forces are having a larger than expected impact on overall retail sales and Alibaba’s market share. Notably, overall retail sales in China slowed down to a meager 5% growth in the September quarter. Slowing consumption, combined with stiff competition from new entrants in livestreaming ecommerce, have resulted in transitory deceleration in Alibaba’s core ecommerce growth trajectory. Additionally, the company is accelerating strategic investments in new initiatives, including Community Group Buying (Taocaicai), Taobao Deals, Local Consumer Services and International Ecommerce. These are future growth drivers but are depressing the company’s earnings today. In December, we exited our full position in Alibaba. This was more of a tactical move than a change in investment conviction. We initiated the position early in 2021, and the continued challenges in the second half of the year resulted in a loss that was material enough to be helpful from a tax distribution management point of view. We are sensitive to taxable gains and try to minimize where sensible, so we took advantage of the opportunity to reduce that liability and plan on revisiting the Alibaba opportunity in 2022. We continue to own Alibaba in our Asia Pacific strategy.”
