# Emerging vs developed markets | PIER20 benchmarks Are emerging markets outperforming the developed world, or falling behind? The emerging vs developed markets benchmark compares the Vanguard emerging-markets ETF (VWO) with the Vanguard developed-markets ETF (VEA), both rebased to 100 at their shared start. A VWO line above the VEA line means emerging markets are beating the developed world over the window; below means developed markets are winning. The spread tracks the emerging-market premium or discount that drives cross-border equity allocation. As of **11 Aug 2026**, the Emerging markets (VWO) line stands at **218.2** and the Developed markets (VEA) line at **270.0** (both base = 100 at the shared start). The Emerging markets (VWO) line is up 22.0% over the past year and above its long-run median of 113.8. ## Summary statistics (full history) | Series | First | Latest | Min | Max | |---|---|---|---|---| | Emerging markets (VWO) | 100.0 | 218.2 | 40.6 | 222.1 | | Developed markets (VEA) | 100.0 | 270.0 | 43.0 | 270.5 | ## Last 24 readings | Date | Emerging markets (VWO) | Developed markets (VEA) | |---|---|---| | Jul 2026 | 215.7 | 262.4 | | Jul 2026 | 217.2 | 263.4 | | Jul 2026 | 213.2 | 258.8 | | Jul 2026 | 214.2 | 262.0 | | Jul 2026 | 215.7 | 262.8 | | Jul 2026 | 213.4 | 259.8 | | Jul 2026 | 209.7 | 258.6 | | Jul 2026 | 210.1 | 256.9 | | Jul 2026 | 213.4 | 261.5 | | Jul 2026 | 213.3 | 261.6 | | Jul 2026 | 210.7 | 258.9 | | Jul 2026 | 209.6 | 258.7 | | Jul 2026 | 211.2 | 259.7 | | Jul 2026 | 209.4 | 258.3 | | Jul 2026 | 206.4 | 255.8 | | Jul 2026 | 211.0 | 263.8 | | Jul 2026 | 213.0 | 262.0 | | Aug 2026 | 214.2 | 263.6 | | Aug 2026 | 217.8 | 268.0 | | Aug 2026 | 217.6 | 268.5 | | Aug 2026 | 217.4 | 267.6 | | Aug 2026 | 219.3 | 270.5 | | Aug 2026 | 218.8 | 269.0 | | Aug 2026 | 218.2 | 270.0 | ## How to read this benchmark **What a positive or negative spread means.** When VWO runs above VEA, emerging markets are leading. Emerging-market leadership has tended to come during commodity booms, dollar weakness and global-growth accelerations. When VEA leads, investors are favoring the safety, governance and growth quality of developed markets, the dominant pattern since the 2013 taper tantrum. The current spread is negative, with developed markets leading. **Why emerging and developed ETFs as the pair.** VWO and VEA together cover the entire non-US investable equity universe split by market classification, so the spread is the cleanest measure of the emerging-versus-developed allocation decision global equity allocators face. Using Vanguard funds keeps the comparison like-for-like: both are broad, liquid, total-return ETFFs with consistent index methodology. **Limitations.** VWO and VEA both report in US dollars, so currency moves affect the spread: a strong dollar depresses both even when local-currency equities are rising. Emerging-market classifications shift as countries develop, so the index composition changes over time. The window begins in mid-2007, missing the 2003-2007 emerging-market supercycle. Treat the chart as context for emerging-versus-developed allocation, not investment advice. **Historical extremes.** On the rebased scale (100 at July 2007), VWO sits near 211 while VEA is near 259, so developed markets lead by roughly 19 percentage points. Both collapsed together during the 2008 financial crisis, with VWO falling harder to roughly 41 (a 59% drawdown) before rebounding. VWO led meaningfully through the 2009-2010 emerging-market rebound but has lagged ever since as the Chinese equity market stalled and developed-market mega-caps pulled away. ## How this benchmark is used **Cross-border equity allocation.** Global equity allocators use the emerging-developed spread as the headline gauge of whether emerging-market overweight or underweight positioning is being rewarded. The persistent developed-market lead since 2013 is the evidence behind the 'developed-market quality premium' allocation thesis. **Dollar and commodity-cycle decomposition.** Emerging-market returns are tightly linked to commodity cycles and dollar direction, because emerging indices are heavy in commodity exporters and their currencies weaken when the dollar strengthens. Strategists track this spread alongside the us-dollar-effect benchmark to separate emerging weakness driven by commodities from weakness driven by dollar strength. **China and India growth-cycle tracking.** Because China and India dominate VWO, the spread is in practice a proxy for the China-plus-India growth story versus the developed world. Allocators watching for emerging-market comebacks use the spread, alongside China-specific stimulus and PMI data, to time entries into VWO. ## Frequently asked questions **What is the current emerging vs developed markets?** As of 11 Aug 2026, the Emerging markets (VWO) line stands at 218.2 and the Developed markets (VEA) line at 270.0 (both base = 100 at the shared start). The Emerging markets (VWO) line is up 22.0% over the past year and above its long-run median of 113.8. **How often is this benchmark updated?** This benchmark is built on daily data. The page is refreshed when the source publishes new observations; the freshness block below the chart shows the exact data-through date and when PIER20 last fetched the file. **What data sources does this chart use?** The chart is built from Emerging markets (VWO) and Developed markets (VEA), sourced from Yahoo Finance. **Have emerging markets beaten developed markets over this window?** No. Since July 2007 the VWO line has risen to roughly 211 on the rebased scale while the VEA line sits near 259, so developed markets lead emerging markets by roughly 19 percentage points. VWO led briefly through the 2009-2010 rebound but has lagged ever since as the Chinese equity market stalled and developed-market mega-caps pulled away. **What does the emerging minus developed spread mean?** The summary callout measures how much the VWO line has outperformed (positive) or underperformed (negative) the VEA line over the selected window, expressed as a percentage. A positive reading means emerging markets have beaten developed markets; a negative reading means developed markets have won. The spread is computed over whichever range you have selected. **Why have developed markets beaten emerging markets?** Three drivers fed the gap. Developed-market mega-cap technology (especially US names) pulled ahead of emerging indices that are heavy in financials, energy and state-owned enterprises. The Chinese equity market stalled for a decade after 2010. And a stronger dollar mechanically depressed emerging-market returns in dollar terms. Each alone might have been offset, but together they produced sustained developed-market outperformance. **How is this different from US vs international?** US vs international splits the ex-US world into the US (VTI) versus everything outside it (VXUS), so it tests the American-exceptionalism thesis. Emerging vs developed splits the non-US world into emerging (VWO) and developed (VEA), so it tests the risk-and-quality premium of emerging markets. The two are complementary: together they cover the full global equity market. ## Methodology - Formula: VWO and VEA adjusted close indexed to 100 at the shared start - Frequency: Daily - Sources: Emerging markets (VWO) https://finance.yahoo.com/quote/VWO; Developed markets (VEA) https://finance.yahoo.com/quote/VEA. Data via Yahoo Finance. - Data through: 11 Aug 2026 - Last refreshed: 11 Aug 2026 ## Related benchmarks - [US vs international equities](https://pier20.com/benchmarks/us-vs-international) - [Large caps vs small caps](https://pier20.com/benchmarks/large-vs-small-cap) - [Growth vs value](https://pier20.com/benchmarks/growth-vs-value) - [Nasdaq-100 vs broad market](https://pier20.com/benchmarks/nasdaq-vs-broad-market) Full interactive chart: https://pier20.com/benchmarks/emerging-vs-developed Disclaimer: research software output, not investment advice.