The Vanguard Total International Stock ETF (VXUS) Explained

The second building block in our asset allocation model is the Vanguard Total International Stock ETF (VXUS), which gives us exposure to equities domiciled outside of the United States. Spanning companies our all sizes within developed and emerging markets, VXUS gives us cheap access to the world markets.

Fund Overview

The Vanguard Total International Stock ETF (VXUS) seeks to replicate the performance of the FTSE Global All Cap ex US Index, capturing 99% of the global equity market outside the United States. Since its 2011 inception, VXUS has become a go‑to vehicle for investors aiming to reduce home‑country bias while maintaining low costs.

• Ticker: VXUS

• Asset Class: Equity – Foreign Large Blend

• Expense Ratio: 0.05%

• Inception Date: January 26, 2011

• Assets Under Management: $100.31B

• Number of Holdings: ~8,622

Top 10 Holdings

The top ten holdings of VXUS together account for just over 10% of the fund’s total assets, offering a concentrated glimpse into its otherwise vast, globally diversified portfolio. Leading the list is Taiwan Semiconductor Manufacturing Co. at 2.47%, followed closely by Samsung Electronics Co. at 1.98%. Tencent Holdings Ltd. from China comes in third at 1.11%, with Dutch chip‑equipment maker ASML Holding N.V. at 0.88% and German software giant SAP SE at 0.87%. Rounding out the mix are Alibaba Group Holding Ltd. at 0.70%, Swiss consumer‑staples heavyweight Nestlé S.A. at 0.70%, and fellow Swiss health‑care leaders Roche Holding AG and Novartis AG, weighted at 0.64% and 0.63% respectively. The final position belongs to a liquidity instrument dated 12/31/2049, representing 0.74% of assets, which serves as a small cash‑equivalent buffer within the fund. This blend of technology, consumer, and pharmaceutical leaders across multiple continents underscores VXUS’s role as a comprehensive non‑U.S. equity allocation.

Geographic Allocation

VXUS spans 51 countries, with significant exposure to both developed and emerging markets.

• Developed Markets: ~75% (Japan, UK, Canada, Switzerland, etc.)

• Emerging Markets: ~25% (China, Taiwan, India, Brazil, etc.)

This blend provides a counterweight to U.S. equities, which have dominated performance for the past decade but historically alternate leadership with international markets.

Performance Snapshot (as of Aug 13, 2025)

• 1‑Year Total Return: 23.07%

• 5‑Year Annualized: 6.89%

• 10‑Year Annualized: 5.56%

• Dividend Yield (TTM): 2.74%

• Payout Frequency: Quarterly

Investment Thesis

VXUS offers broad, low‑cost access to virtually every investable equity market outside the U.S., making it a core diversifier in a global portfolio. Key advantages:

• Valuation Opportunity: Many non‑U.S. markets trade at lower P/E ratios than the S&P 500.

• Currency Diversification: Exposure to multiple currencies can hedge against USD weakness.

• Sector Mix: Greater weight to financials, industrials, and materials compared to U.S. indexes.

Risks to Consider

• Currency Volatility: FX swings can amplify or erode returns.

• Geopolitical Risk: Emerging markets carry higher political and regulatory uncertainty.

• Relative Underperformance: U.S. markets have outpaced international peers for much of the past decade — a trend that could persist.

The Bottom Line

Our goal in allocating assets to VXUS is to have exposure to stable developed world markets and growth oriented emerging markets. VXUS is a cost‑efficient, all‑in‑one solution. Paired with a U.S. total market fund like VTI, it can form the backbone of a two‑fund global equity strategy — one that captures growth wherever it occurs.

Two ETFs down, nine to go. Tomorrow, we shift our focus to “risk-off” assets and explore the US bond market through an analysis of the Vanguard Total Bond Market ETF (BND). Be sure to be on the look out for our asset allocation model’s updated rankings, which we will make available on X (@beechhurstcap) this evening after we complete the weekly update of our model. A full analysis of each ETF will be available here in a separate post. Until then, be well and stay safe.