Investing in international stocks often feels complicated, but in reality, you
can gain broad global exposure with just a few well-designed ETFs. One of the
most popular options is VXUS (Vanguard Total International Stock ETF). As its
name suggests, VXUS allows you to invest in the entire global stock market
excluding the United States, making it an excellent complement to a
U.S.-focused portfolio.
In this post, you’ll learn what VXUS is, how it’s structured, its benefits,
and what to consider before investing—explained in a beginner-friendly way.
1. What Is VXUS?
VXUS is a global equity ETF created by Vanguard, one of the largest and most
trusted asset managers in the world. The ETF includes both developed markets
and emerging markets, covering virtually all major countries outside the U.S.
That means VXUS holds stocks from countries like Republic of Korea, Japan, the
U.K., Germany, France, and Canada, as well as emerging markets such as China,
India, Taiwan, Brazil, and Indonesia.
VXUS tracks the FTSE Global All Cap ex US Index, a broad market index that
covers large-cap, mid-cap, and small-cap companies. Because the index is so
wide and diversified, investors can gain exposure to thousands of global
companies with just a single ETF—no need to pick individual stocks or worry
about regional biases.
Visit Vanguard ETF Official Website for VXUS
*This post contains affiliate links. As an Amazon Associate I earn from qualifying purchases.
2. Understanding VXUS’s Structure and Allocation
To understand VXUS more easily, imagine the global stock market as:
- Global Market = U.S. Market + Non-U.S. Market
-
The U.S. typically accounts for about 60% of global market
capitalization—meaning VXUS represents the remaining 40% of the global
market.
-
VXUS is heavily weighted toward developed markets such as Republic of
Korea, Japan, the U.K., Canada, Germany, and France. Below that are
emerging markets including China, India, and Taiwan.
Sector exposure is also well-balanced across technology, financials,
industrials, consumer goods, and more. Because VXUS holds more than 7,000
stocks, the risk of depending on any single company or sector is extremely
low. This broad diversification is why VXUS is often considered one of the
most stable building blocks for a long-term global portfolio.
3. Key Benefits of VXUS: Diversification, Lower Risk, and Better Portfolio
Balance
The biggest advantage of VXUS is extreme diversification. If your portfolio
is heavily weighted toward U.S. stocks (like VOO, SPY, or VTI), you might be
unintentionally relying too much on one country. VXUS helps rebalance that
exposure.
When the U.S. market struggles, other regions—such as Europe or Asia—may
hold up better. This lowers your overall portfolio volatility over time
because different regions do not always move in the same direction.
VXUS is also a great fit for long-term investors since its broad global
exposure leads to steady, gradual growth rather than sharp short-term
swings. The popular “global portfolio” combination—VTI (U.S.) + VXUS
(international)—gives you exposure to nearly the entire world stock market.
A mix like VTI 60% + VXUS 40% closely mirrors global market weighting and is
widely used by passive investors.
4. Things to Consider & Who Should Invest in VXUS
VXUS isn’t perfect, and there are a few points to keep in mind:
-
VXUS may underperform U.S.-only ETFs during times when U.S. tech giants
dominate the market.
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Some exposure to emerging markets means slightly higher volatility in
the short term.
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Performance can lag when global markets outside the U.S. grow slowly.
However, these factors are generally mitigated by the ETF’s broad
diversification and long-term focus.
VXUS is ideal for:
- Those who want to reduce U.S. concentration
- Anyone aiming for balanced global exposure
- Beginners who want an easy, all-in-one international ETF
Because VXUS automatically invests in thousands of companies across dozens
of countries, it’s one of the simplest ways to build a globally diversified
portfolio without picking individual stocks.
*This post contains affiliate links. As an Amazon Associate I earn from qualifying purchases.
*The information in this article is provided for informational purposes
only. All investment decisions and results are solely the responsibility of
the investor.
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