VEU vs. VXUS - Comparing International ETFs
VXUS vs. VEU Overview
Vanguard FTSE All-World ex-US ETF (VEU) and Vanguard Total International Stock ETF (VXUS) are both popular passive international ETFs from Vanguard.
They aim to mimic the performance indices that exclusively track stocks from developed and emerging markets, excluding the U.S.
VEU and VXUS invest in non-US companies
VXUS holds many more companies than VEU
VEU and VXUS have nearly identical dividends and performance
Expense Ratio Comparison
VEU - 0.08%
VXUS - 0.07%
Both VXUS and VEU come with low expense ratios, characteristic of Vanguard’s competitive fee structure.
VEU carries an expense ratio of 0.08%, while VXUS has a slightly lower expense ratio of 0.07%.
Dividend Yield Comparison
On the dividends front, both ETFs provide similar yields.
Both VEU and VXUS pay a dividend yield of around 2.20%.
Holdings Comparison
While both ETFs target non-U.S. stocks, when it comes to individual holdings, there are some variations. As we know, VEU tracks the FTSE All-World ex-US Index, leading to a portfolio comprising about 3,500 stocks across various countries and sectors.
On the other hand, VXUS, following the FTSE Global All Cap ex US Index, offers broader diversification with around 7,500 stocks in its basket, including exposure to small-cap stocks.
Performance Comparison
VEU and VXUS have historically provided investors with nearly identical returns.
VXUS, with its exposure to small-cap stocks, could perform better in a bullish market scenario where these stocks typically outperform.
On the flip side, in a falling market, VEU, with its bias towards larger companies, could prove more resilient, as large-cap stocks usually fare better during downturns.
Which is Better for You?
If you prefer broader diversification with an added small-cap exposure, VXUS would be the likely choice. However, if you lean towards large and mid-cap international stocks, VEU might suit your needs better.
Both VEU and VXUS offer solid options for diversifying the equity portion of your portfolio with international exposure.
Whichever you choose, it is not going to make a significant difference in your long-term returns.
If you want to learn more about trading and investing in the stock market, you should join the HaiKhuu Trading Community.
HaiKhuu provides live trading calls, daily morning reports, and an awesome community of like-minded traders and investors willing to help you out!
Frequently Asked Questions
What index does VEU track?
VEU tracks the FTSE All-World ex-US Index. This index comprises large and mid-cap stocks across numerous developed and emerging markets worldwide, excluding the United States.
