If you're aiming to diversify beyond U.S. borders, VXUS is one ETF you shouldn't overlook.
This ETF offers broad exposure to international stock markets outside the U.S., covering both developed and emerging countries. In this post, we’ll dive into what makes VXUS an essential building block for a truly global portfolio.
🧾 What is VXUS ETF?
The Vanguard Total International Stock ETF (VXUS) provides exposure to the entire global stock market, excluding the United States.
Launched in 2011 by Vanguard, this ETF tracks thousands of companies across Europe, Asia, and emerging markets.
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Issuer: Vanguard
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Expense Ratio: 0.07%
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Benchmark Index: FTSE Global All Cap ex US Index
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Number of Holdings: ~7,500 stocks
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Dividend Frequency: Quarterly
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Dividend Yield: Approximately 3% (varies by market conditions)
VXUS uses market-cap-weighted allocation, covering large-, mid-, and small-cap international stocks.
🌍 Country and Sector Exposure
VXUS invests in over 40 countries, with large allocations to both developed and emerging markets.
▶️ Top Countries (2025)
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Japan – ~15%
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United Kingdom – ~9%
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China – ~8%
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Canada – ~7%
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France – ~6%
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Germany – ~5%
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Others: Switzerland, Australia, Taiwan, India
▶️ Sector Exposure
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Financials
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Industrials
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Consumer Goods
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Technology
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Energy
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Healthcare
📊 Top 10 Holdings in VXUS
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Taiwan Semiconductor Manufacturing (TSMC)
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Nestlé
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ASML Holding
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Samsung Electronics
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Roche
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Toyota Motor
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Novartis
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HSBC Holdings
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AstraZeneca
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LVMH
These holdings represent leading global companies in their respective industries, offering wide geographic and sectoral diversification.
✅ Advantages of VXUS ETF
1. Extensive Global Diversification
VXUS includes thousands of stocks across non-U.S. markets, reducing the risk of being overexposed to a single country or region.
2. Low Expense Ratio
At just 0.07%, VXUS is extremely cost-efficient for long-term international investing.
3. Emerging Market Exposure
The ETF includes countries like China, India, Brazil, and Southeast Asia, offering growth potential beyond mature economies.
4. Wide Industry and Market Cap Coverage
With over 7,500 stocks, VXUS spreads exposure across various sectors and company sizes.
❌ Disadvantages of VXUS ETF
1. No U.S. Stock Exposure
VXUS excludes U.S. stocks, so it's not a complete global solution by itself. You’ll need to pair it with a U.S.-based ETF (e.g., VTI or SPY) to achieve total market exposure.
2. Lower Growth Potential Compared to U.S.
Historically, non-U.S. markets have underperformed the U.S. in terms of long-term growth, especially in the tech sector.
3. Currency Risk
Since investments are made in foreign currencies, exchange rate fluctuations can affect the ETF’s performance for USD-based investors.
💡 Who Should Consider VXUS?
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📌 Investors looking to diversify beyond the U.S.
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📌 Those concerned about geopolitical risk or overconcentration in U.S. equities
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📌 Long-term investors building a globally diversified portfolio
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📌 Anyone planning to combine VXUS with U.S. ETFs like VTI
🔍 VXUS vs VTI vs VT Comparison
| Feature | VXUS | VTI | VT |
|---|---|---|---|
| Market Coverage | Global ex-U.S. | U.S. only | Global (incl. U.S.) |
| Holdings | ~7,500 | ~4,000 | ~9,000 |
| Expense Ratio | 0.07% | 0.03% | 0.07% |
| Dividend Yield | ~3% | ~1.5% | ~2.3% |
→ Combine VXUS with VTI to build a fully diversified global portfolio.
→ Want a simple one-ETF solution? Consider VT, which includes both U.S. and international markets.
📌 Final Takeaway
VXUS is a powerful ETF for gaining global exposure outside the U.S.
If you're already investing in U.S.-centric ETFs like VTI or SPY, adding VXUS helps create a more balanced and internationally diversified portfolio.
This post is not a buy or sell recommendation, but an introduction to the ETF.
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