The Vanguard FTSE Emerging Markets ETF (VWO) stated in its February 27, 2026 statutory prospectus that the fund could become a concentrated bet on a single issuer without requiring a shareholder vote, solely through price action or index rebalance. The prospectus highlights that under the Investment Company Act of 1940, a fund becomes nondiversified if it holds more than 5% of its total assets in a single issuer. US-China policy shifts, such as sanctions, variable interest entity (VIE) vulnerabilities, or yuan swings, could lead to a sudden repricing of VWO's largest holdings, as demonstrated by the fund's -18% return in 2022.