What Is VXUS?
Every stock market outside the U.S. — 8,700 companiesacross 47 countries in a single ETF.
$558B+ in assets · 0.05% fee · ~2.9% yield · Quarterly dividends
Over the past decade, $10,000 in the VXUS ETF grew to $22,706. That same $10,000 in VTI — its domestic counterpart — turned into $37,899. A $15,193 gap. International investors have been getting punished for diversifying.
Then 2025 happened. The Vanguard Total International Stock ETF returned +32.35%, crushing VTI’s +17.10% by over 15 percentage points. One year erased a third of the decade-long deficit. Was that a blip — or the start of something?
I pulled 10 years of data on the VXUS ETF to answer that. Growth numbers, risk metrics, country exposure, dividend yield, and the real cost of skipping international stocks entirely.
$10K Growth Test: VXUS ETF vs VTI (5-Year and 10-Year)
Both funds started from $10,000. One owns every stock outside the United States. The other owns every stock inside it. Here’s how they diverged.
| Period | VXUS | VTI | Gap |
|---|---|---|---|
| 5 Years (2021–2025) | $14,740 | $18,485 | −$3,746 |
| 10 Years (2016–2025) | $22,706 | $37,899 | −$15,193 |
| 5-Year CAGR | 8.07% | 13.07% | −5.00% |
| 10-Year CAGR | 8.55% | 14.25% | −5.70% |
Fifteen thousand dollars. That’s the cost of going global over the past decade. Brutal on paper — but the gap was even wider before 2025’s reversal. At the end of 2024, VXUS trailed by over $4,600 on the five-year window alone.
$10,000 → 10 Years Later
Gap: $15,193 · VTI leads by 66.9% over 10 years
The real question isn’t whether VXUS underperformed. It did. The question is whether the next decade looks like the last one — and the data says that’s far from guaranteed.
Risk Profile: Not the Safety Net You’d Expect
International diversification is supposed to reduce risk. Over the past decade, the VXUS ETF didn’t deliver that promise — at least not consistently.
| Metric | VXUS | VTI |
|---|---|---|
| Max Drawdown (Since Inception) | -35.97% | -55.45% |
| 5-Year Max Drawdown (2022) | -23.55% | -23.93% |
| Annualized Volatility | 14.33% | 15.40% |
| Beta (5Y) | 1.01 | 1.00 |
| Sharpe Ratio | 0.77 | 0.96 |
| Correlation (VXUS ↔ VTI) | 0.82 | |
One stat stands out: the 0.82 correlation. That’s high enough that VXUS and VTI largely move together — but low enough that they diverge in key moments. The 2022 bear market saw nearly identical drawdowns. But over longer stretches, VXUS has shown slightly lower volatility (14.33% vs 15.40%).
The Sharpe ratio gap (0.77 vs 0.96) tells the uncomfortable truth. VXUS took similar risk and delivered less return — a poor trade over the past five years. That said, Sharpe ratios shift with market regimes. A weak U.S. dollar cycle would flip this metric fast.
Year-by-Year Total Returns (Dividends Reinvested)
| Year | VXUS | VTI | Difference |
|---|---|---|---|
| 2016 | +4.81% | +12.83% | -8.02% |
| 2017 | +27.45% | +21.21% | +6.24% |
| 2018 | -14.43% | -5.21% | -9.22% |
| 2019 | +21.75% | +30.67% | -8.92% |
| 2020 | +10.69% | +21.03% | -10.34% |
| 2021 | +9.00% | +25.67% | -16.67% |
| 2022 | -16.09% | -19.51% | +3.42% |
| 2023 | +15.88% | +26.05% | -10.17% |
| 2024 | +5.08% | +23.81% | -18.73% |
| 2025 | +32.35% | +17.10% | +15.25% |
VXUS vs VTI — Who Won Each Year?
VXUS won 3 of 10 years — but 2025 alone was the biggest single-year swing of the decade
VXUS won 3 out of 10 years: 2017, 2022, and 2025. Out of those three, two came during periods of U.S. dollar weakness or U.S. market stress. The pattern is worth watching — not because it predicts the future, but because it shows when international diversification actually does its job.
2024 was the worst gap in the entire decade: -18.73%. U.S. mega-cap tech drove VTI to +23.81% while international markets barely moved. Then 2025 snapped back with VXUS gaining +32.35% — its best calendar year in at least 15 years.
Top 10 Holdings
The VXUS ETF holds over 8,700 stocks across 47 countries. No single company exceeds 3.2% of the fund. That’s a level of diversification no U.S.-only fund can match.
| Company | Country | Weight |
|---|---|---|
| Taiwan Semiconductor (TSM) | Taiwan | 3.18% |
| ASML Holding | Netherlands | 1.34% |
| Samsung Electronics | South Korea | 1.23% |
| Tencent Holdings | China | 1.12% |
| Alibaba Group | China | 0.91% |
| SK Hynix | South Korea | 0.79% |
| Roche Holding | Switzerland | 0.76% |
| HSBC Holdings | UK | 0.72% |
| Novartis | Switzerland | 0.68% |
| Nestlé | Switzerland | 0.63% |
| Top 10 Total | 11.36% | |
The top 10 represent just 11.36% of the fund — compared to VTI where the top 10 (Apple, Microsoft, Nvidia, etc.) control roughly 30%. If concentration risk keeps you up at night, the VXUS ETF is the opposite extreme: 8,700 positions and no single stock dominates.
Three countries have more than one company in the top 10: Switzerland (Roche, Novartis, Nestlé), South Korea (Samsung, SK Hynix), and China (Tencent, Alibaba). That’s a mix of defensive healthcare, semiconductor supply chain, and consumer tech — sectors that barely overlap with VTI’s mega-cap tilt.
Country and Region Allocation
The VXUS ETF splits roughly 75% developed markets and 25% emerging markets. That’s a much higher emerging-market allocation than most international funds — which often exclude them entirely.
| Country/Region | VXUS Weight |
|---|---|
| 🇯🇵 Japan | ~15% |
| 🇬🇧 United Kingdom | ~9% |
| 🇨🇳 China | ~8% |
| 🇨🇦 Canada | ~7% |
| 🇮🇳 India | ~6% |
| 🇫🇷 France | ~6% |
| 🇹🇼 Taiwan | ~6% |
| 🇨🇭 Switzerland | ~6% |
| 🇩🇪 Germany | ~5% |
| 🇦🇺 Australia | ~4% |
| Other (37+ countries) | ~28% |
Japan is the single largest country at 15% — roughly the same weight Apple alone has in VTI. That kind of single-stock vs single-country concentration tells you something about why these funds behave so differently.
| Sector | VXUS | VTI (est.) |
|---|---|---|
| Financial Services | 22.96% | ~13% |
| Industrials | 15.96% | ~9% |
| Technology | 15.59% | ~34% |
| Consumer Cyclical | 9.41% | ~10% |
| Healthcare | 7.77% | ~11% |
| Basic Materials | 7.68% | ~2% |
VXUS Sector Breakdown — Visual
The sector story explains most of the decade-long underperformance. VTI has 34% in tech — driven by Apple, Microsoft, Nvidia, and Amazon. VXUS has 15.59%. That 18-point tech gap was the performance gap. Financial Services (23% in VXUS vs 13% in VTI) and Basic Materials (7.7% vs 2%) tell you this fund is structurally different from the U.S. market.
When tech leads, VTI wins. When value sectors rotate back — financials, industrials, materials — VXUS has room to close the gap. That rotation started in late 2024 and accelerated through 2025.
Dividend & Cost Analysis
The VXUS ETF charges an expense ratio of 0.05% — tied with VTI as one of the cheapest ETFs available. On a $100,000 portfolio, that’s $50 per year. Cost is not a factor here.
| Metric | VXUS | VTI |
|---|---|---|
| Expense Ratio | 0.05% | 0.03% |
| Trailing Dividend Yield | ~2.9% | ~1.2% |
| Distribution Frequency | Quarterly | Quarterly |
| Annual Turnover | 4% | 4% |
VXUS’s dividend yield is more than double VTI’s — roughly 2.9% vs 1.2%. International companies, especially in Europe and Asia, tend to distribute more earnings as dividends rather than buybacks. That income partially offsets the total return gap. Over 10 years, VXUS reinvested dividends added meaningful compounding to the growth figure.
One tax note: a portion of VXUS dividends may qualify for the Foreign Tax Credit, which can offset taxes on international dividend income. This makes VXUS slightly more tax-efficient in taxable accounts than the raw yield number suggests.
Who Should Buy, Consider, or Skip the VXUS ETF
Investors building a 3-fund portfolio (VTI + VXUS + BND). VXUS fills the international equity slot with one purchase — covering developed and emerging markets at 0.05%.
Investors who already own VTI or VOO and want exposure beyond U.S. stocks. Allocation targets vary widely — some investors hold 20-40% international, though the right split depends on individual goals.
Investors seeking income-first strategies or those unwilling to accept prolonged underperformance vs U.S. indices. The decade-long gap requires patience and conviction.
VXUS ETF vs Competitors: Quick Comparison
| Feature | VXUS | IXUS (iShares) | VEA (Vanguard) |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.07% | 0.03% |
| Holdings | ~8,700 | ~4,400 | ~4,000 |
| Emerging Markets | ✅ Included (~25%) | ✅ Included (~25%) | ❌ Excluded |
| Small Caps | ✅ Included | ❌ Large/Mid Only | ❌ Large/Mid Only |
| AUM | ~$558B | ~$45B | ~$170B |
VXUS casts the widest net — it includes emerging markets and small caps that VEA and IXUS leave out. VEA is the closest alternative for investors who want developed-market-only exposure. IXUS is iShares’ comparable all-international fund, but with fewer holdings and a slightly higher fee.
The Case for Patience With the VXUS ETF
The VXUS ETF’s 10-year track record looks painful next to VTI — a $15,193 gap on $10,000. But this fund wasn’t designed to beat U.S. stocks. It was designed to own everything they don’t. With 8,700 holdings across 47 countries at 0.05%, it’s the broadest and cheapest way to access non-U.S. markets.
The 2025 data — a +32.35% year — suggests the long drought may be shifting. Past performance guarantees nothing, but portfolios built on only one country carry a risk that’s harder to measure in a table.
VXUS ETF — Quick Reference
| Fund Name | Vanguard Total International Stock ETF |
| Ticker | VXUS |
| Index | FTSE Global All Cap ex US |
| Expense Ratio | 0.05% |
| AUM | ~$558 billion |
| Holdings | ~8,700 |
| Inception Date | January 26, 2011 |
| Dividend Yield | ~2.9% |
| Distribution | Quarterly |
| Turnover | 4% |
| P/E Ratio | ~16.9 |
| Issuer | Vanguard |
Frequently Asked Questions
Is the VXUS ETF a good investment for beginners?
VXUS is one of the most widely held ETFs for building a globally diversified portfolio. Combined with VTI (U.S. stocks) and BND (bonds), it forms what’s often called the three-fund portfolio. The 0.05% expense ratio keeps costs minimal, and 8,700 holdings provide broad exposure with a single purchase.
Why has the VXUS ETF underperformed VTI for so long?
U.S. tech dominance is the primary driver. VTI’s 34% technology weighting — led by Apple, Microsoft, and Nvidia — outpaced international sectors like financials and industrials. Currency headwinds from a strong U.S. dollar also dragged on international returns. These conditions can and do reverse, as 2025’s data shows.
What’s the difference between the VXUS ETF and VEA?
VXUS includes both developed and emerging markets (47 countries, ~8,700 stocks). VEA covers only developed markets (about 4,000 stocks), excluding countries like China, India, Taiwan, and Brazil. Investors who want complete ex-U.S. coverage in one fund typically choose VXUS.
How much of my portfolio should be in international stocks?
There’s no single answer. Vanguard’s target-date funds typically allocate 40% of equities to international stocks. Across the industry, 20-40% is a commonly cited range. The allocation depends on individual risk tolerance, time horizon, and views on U.S. vs global growth. Historical data shows that international diversification has reduced portfolio volatility over multi-decade periods.
Does the VXUS ETF include China and emerging markets?
Yes. Approximately 25% of the VXUS ETF is allocated to emerging markets, including China (~8%), India (~6%), Taiwan (~6%), and South Korea. This is significantly more than most international funds in the Foreign Large Blend category, where emerging-market exposure averages around 10%.
This article is for informational purposes only and does not constitute investment advice. Always do your own research or consult a licensed financial advisor before making investment decisions.