Vanguard Total International Stock ETF (VXUS) Guide

The Vanguard Total International Stock ETF (VXUS) is a leading exchange-traded fund designed to offer investors a comprehensive way to access equity markets outside of the United States. Managed by The Vanguard Group, VXUS provides a convenient vehicle for diversifying a portfolio across thousands of companies in both developed and emerging economies. As global markets become increasingly interconnected, many investors look to the Vanguard Total International Stock ETF (VXUS) to capture growth opportunities that are not available within domestic U.S. exchanges.

Investment Objective and Strategy

The primary goal of the Vanguard Total International Stock ETF (VXUS) is to track the performance of the FTSE Global All Cap ex US Index. This index measures the investment return of stocks of companies located in developed and emerging markets around the world, excluding the United States.

Passive Management and Efficiency

Vanguard employs a passive management or indexing investment approach. Instead of trying to "beat the market" through active stock picking, the fund attempts to replicate the target index by holding all, or a representative sample, of the securities that make up the index. This strategy helps minimize tracking error and keeps turnover low, which in turn reduces transaction costs and potential tax liabilities for shareholders.

Portfolio Composition and Characteristics

One of the defining features of the Vanguard Total International Stock ETF (VXUS) is its immense diversification. As of late 2023 and early 2024, the fund holds over 8,000 different stocks, significantly reducing the risk associated with any single company or country.

Geographic Distribution

The fund's assets are distributed across several key regions:

• Europe: Typically the largest allocation, including markets like the UK, France, and Germany.
• Pacific: Significant exposure to Japan and Australia.
• Emerging Markets: Includes high-growth regions such as China, India, and Taiwan.
• North America: Small allocations to non-U.S. markets like Canada.

Sector Weightings and Top Holdings

VXUS is well-balanced across various economic sectors. Financials, Technology, and Industrials usually represent the largest weightings. Its top holdings often include global giants such as Taiwan Semiconductor Manufacturing Co. (TSMC), ASML Holding, Novo Nordisk, and Tencent Holdings. This gives investors exposure to the "non-U.S. equivalents" of major tech and healthcare leaders.

Financial Performance and Cost

For many investors, the cost is the most compelling reason to choose the Vanguard Total International Stock ETF (VXUS). It boasts an expense ratio of 0.05%. This is significantly lower than the industry average for international equity funds, allowing more of the investment's return to stay in the investor's pocket over the long term.

Historical Returns and Dividend Yield

While past performance does not guarantee future results, VXUS has historically provided a steady reflection of the international market's health. Additionally, because many international companies prioritize dividends, VXUS often provides a competitive dividend yield compared to U.S.-only indices like the S&P 500. Dividends are typically distributed on a quarterly basis.

Market Role and Trading

The Vanguard Total International Stock ETF (VXUS) is listed on the NASDAQ and is highly liquid, meaning it can be bought and sold easily throughout the trading day. It is a staple on major brokerage platforms, including those that bridge traditional finance and digital assets like Bitget’s broader financial ecosystem tools. Its high average daily trading volume ensures tight bid-ask spreads, making it efficient for both retail and institutional traders.

Technical Analysis and Investor Sentiment

Market analysts often compare the performance of VXUS against U.S.-based ETFs like VTI (Vanguard Total Stock Market ETF). This "International vs. U.S." sentiment often shifts based on currency fluctuations—specifically the strength of the U.S. Dollar—and geopolitical stability. When the dollar weakens, the returns for VXUS often see a boost for U.S.-based investors.

Comparison with Similar Funds

While the Vanguard Total International Stock ETF (VXUS) is a market leader, it is often compared to other funds:

• VXUS vs. VEU: While both track international markets, VXUS includes small-cap stocks, whereas VEU (Vanguard FTSE All-World ex-US ETF) focuses primarily on large and mid-cap companies.
• Competitors: Other alternatives include the iShares Core MSCI ACWI ex US ETF (ACWX), though Vanguard often maintains a slight edge in having a lower expense ratio.

Expand Your Financial Knowledge

Understanding the role of diversified ETFs like the Vanguard Total International Stock ETF (VXUS) is a vital step in building a resilient portfolio. While VXUS covers the traditional equity side, many modern investors are diversifying further by exploring digital assets. You can learn more about market trends, blockchain technology, and asset diversification by visiting the Bitget Academy or using the Bitget Wallet to manage your cross-chain assets efficiently.