Ask most U.S. investors what percentage of their portfolio is international, and you’ll often get a blank stare. The home-country bias — the tendency to invest almost entirely in domestic markets — is real, well-documented, and potentially costly. VXUS, the Vanguard Total International Stock ETF, is the simplest solution to that problem.
- VXUS holds over 8,600 stocks across 47+ countries outside the U.S. — the broadest international diversification available in one ETF.
- Expense ratio of 0.05% makes it one of the cheapest international ETFs on the market.
- Historically underperformed U.S. stocks (VTI) over the past decade, but the gap may narrow as U.S. valuations remain elevated.
- Most financial experts recommend a 20–40% international allocation — VXUS is the most common way to achieve it.
Bottom line: VXUS is an excellent core holding for investors seeking international exposure. Pair it with VTI for a complete global equity portfolio.
What Is VXUS?
VXUS (Vanguard Total International Stock ETF) is a passively managed ETF that tracks the FTSE Global All Cap ex US Index. In plain English: it owns virtually every publicly traded stock outside the United States, across both developed and emerging markets.
Key facts:
- Ticker: VXUS
- Issuer: Vanguard
- Expense ratio: 0.05% (just $0.50 per $1,000 invested annually)
- Number of holdings: ~8,600+ stocks
- Total assets: $70+ billion (as of 2026)
- Geographic coverage: 47+ countries
- Dividend yield: ~3.0% (trailing 12-month)
What Does VXUS Hold?
VXUS’s geographic breakdown skews heavily toward developed markets (~80%), with meaningful emerging market exposure (~20%). Top country weights include:
- Japan (~15%) — Toyota, Sony, SoftBank
- United Kingdom (~9%) — Shell, AstraZeneca, HSBC
- China (~8%) — Alibaba, Tencent, Meituan (emerging market)
- France (~7%) — LVMH, TotalEnergies, Sanofi
- Canada (~6%) — Royal Bank, Shopify, Canadian Natural Resources
The fund’s sector weightings roughly mirror global market-cap distribution, with financials, industrials, and consumer discretionary being the largest sectors internationally.
VXUS vs. VTI: Performance and Valuations
The honest comparison every VXUS investor needs to make is against VTI (Vanguard Total Stock Market ETF). Over the past decade (2015–2025), VTI has significantly outperformed VXUS — roughly 12–13% annualized for VTI versus 6–7% for VXUS.
Does that mean you should skip international stocks? Not necessarily, for several reasons:
- Valuations: U.S. stocks, particularly tech, trade at historically high price-to-earnings ratios. International stocks, by contrast, are trading at multi-decade discount valuations relative to U.S. equities.
- Historical cycles: International stocks outperformed U.S. stocks from 2000–2010. Market leadership rotates. The next decade may look very different from the last.
- Currency diversification: International stocks give you exposure to the euro, yen, pound, and other currencies — useful if the U.S. dollar weakens over time.
- Risk reduction: Academic research consistently shows that international diversification reduces portfolio volatility over the long run.
The Classic VTI + VXUS Portfolio
Many financial advisors and portfolio designers use VTI + VXUS as a two-fund complete equity portfolio that covers the entire global stock market. A common split:
- 60% VTI — U.S. total market
- 40% VXUS — International total market
This roughly mirrors the global market-cap split between U.S. and non-U.S. stocks. Some investors tilt heavier U.S. (80/20 or 70/30) given recent U.S. outperformance, while others match the global benchmark more closely.
Should You Own VXUS?
VXUS makes sense if:
- You want true global diversification rather than 100% U.S. exposure
- You’re building a long-term portfolio and want to hedge against prolonged U.S. underperformance
- You want a higher dividend yield than typical U.S. growth-focused ETFs
- You believe international valuations represent a long-term opportunity
VXUS may not be for you if:
- You’re extremely U.S.-growth-focused and comfortable with concentrated domestic risk
- You’re bothered by currency fluctuations impacting your returns
- You prefer simplicity — one fund like VT (Vanguard Total World) covers both U.S. and international in a single ticker
Bottom Line
VXUS is one of the best international ETFs available. At 0.05% expense ratio with 8,600+ holdings across 47+ countries, it’s hard to find a cheaper or more diversified way to gain international exposure. Whether you allocate 20%, 30%, or 40% of your equity portfolio to VXUS is a personal choice — but ignoring international markets entirely means concentrating 100% of your equity risk in one country. Pair VXUS with VTI for a low-cost, globally diversified foundation that can anchor a portfolio for decades.
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WealthIQ Editorial
This article was produced by the WealthIQ editorial team using AI-assisted research and drafting, with review for accuracy before publication. Sources include IRS.gov, SEC.gov, FDIC.gov, and Federal Reserve data. View our editorial standards →