Entering text into the input field will update the search result below

VXUS: A Decent Cornerstone For A Globally Diversified Portfolio

DGI Journeyman profile picture
DGI Journeyman


  • The Vanguard Total International Stock ETF is a well-rounded international equity ETF with a very low expense ratio of 0.11%.
  • The fund's 6000+ holdings span 49 countries.
  • A distinct tilt away from tech stocks and towards energy and financial services give this index ETF a yield advantage over many of its competitors.
  • However, other funds exist with similar portfolio allocations and lower fund expenses.

Investors who are expecting to earn 10% annual returns on their investment portfolios, especially the US-focused portion of their portfolio, might be in for a rude awakening over the next few decades. According to a recent analysis by Charles Schwab, elevated equity market valuations and low rates of economic growth are expected to depress returns across all asset classes over the next decade. The asset class most affected: US Stocks, especially large-capitalization companies.

Source: Charles Schwab

One asset class which fares relatively well under Schwab's scenario? International stocks. As US equities chugged ever-higher in the wake of the Great Recession, international stocks stumbled starting in around 2012, as the chart below illustrates.

The Vanguard Total International Stock ETF (NASDAQ:VXUS) is one such vehicle for gaining exposure to international markets. While the fund itself is less than a decade old, Vanguard has been central to the evolution of the retail asset management business since the 1980's. In particular, Vanguard has become known for its low fund expenses. This reputation is well earned, as VXUS charges only a 0.11% management fee. This low fee has, in turn, helped VXUS to attract over $11 billion in assets under management, making fund closure risk virtually nonexistent.

Portfolio Allocation

As with most broad-market international index funds, VXUS's portfolio holdings skew towards developed-market Europe as well as Japan. However, its 21% allocation to emerging markets ensures that investors in the fund have ample exposure to the high long-term growth that is expected to occur in these markets over the next few decades. Top emerging market holdings include Tencent, Alibaba, and China Construction Bank Corporation.

Source: Fund Website

Where VXUS gets more interesting is in terms of its sector allocations. While a large portion of index funds tend to assign technology stocks a relatively

This article was written by

DGI Journeyman profile picture
Indiviudal investor building a dividend income portfolio in order to achieve a personal goal of financial security both now and in the future. Looking to share my portfolio research with and receive feedback from the SA community. Enjoys action movies, pizza, long walks on the beach, and dividend increases.

Analyst’s Disclosure: I am/we are long VXUS, IXUS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (1)

Chester the Income Investor profile picture
Super long VXUS - immediate and incredible diversification at a good price. I anticipate a fee cut to keep up with the Jones’
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.