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VXUS vs VT: Which ETF Is Right For You?

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We compare VXUS vs VT.

Vanguard Total International Stock ETF (VXUS) vs Vanguard Total World Stock ETF (VT)

There is no shortage of options for investing in Exchange Traded Funds (ETFs).

Choosing between two funds can be difficult, but I will make it easy to decide between VXUS and VT.

VXUS vs VT Graphic

 

VXUS vs VT

The primary difference between VXUS and VT is the asset allocation of the exchange-traded fund (ETF). 

VXUS = 100% International Stocks

VT = 60% U.S stocks / 40% International Stocks

Another significant difference is the number of stocks in each, with VT having 9299 different companies in the index compared to 7765 with VXUS.

VT

  • Tracks the FTSE Global All Cap Index
  • Expense Ratio: 0.08%
  • No Minimum Investment
  • Holds 9299 Stocks

VXUS

  • Tracks the FTSE Global All Cap ex-US Index
  • Expense Ratio: 0.08%
  • No Minimum Investment
  • Holds 7765 Stocks

 

VXUS vs VT Performance

VXUS and VT have performed very differently over the last 10 years, with VT beating VXUS by more than 4% annually.

VXUS vs VT Performance Comparison

That is a significant difference, especially when considering compound interest on those returns.

Here is how their performance compares:

VXUS vs VT Performance

VXUS (Blue)          VT (Yellow)

As you can see, VT has significantly outperformed VXUS over the years.  However, this doesn’t necessarily mean this trend will continue.

Similarities between VXUS and VT:

  • Exchange-Traded Funds (ETFs)
  • Low Expense Ratios
  • Well Diversified

 

VXUS vs VT Holdings

The main difference between VXUS and VT holdings is their regional allocation.  For example, VXUS has an allocation of 100% international companies, while VT is 40% international and 60% U.S.

Here are VXUS and VT holdings side by side:

VXUS vs VT Holdings

 

VXUS has a 4% exposure to Korea and currently an 8% exposure to China.

 

VXUS and VT Differences

The main difference between VXUS and VT is that VT includes U.S-based companies and some international companies as well.  VXUS holds a collection of stocks from companies worldwide, excluding the United States. 

VT also has more holdings in the index compared to VXUS.

VXUS vs VT Comparison Chart

By investing in an ETF with more holdings, you are helping diversify your portfolio and minimize risk.

Differences between VXUS and VT:

  • Different Number Of Holdings (7,765 vs 9,299)
  • Asset Allocation (Domestic vs International)

 

VT Profile

  • Fund Inception: 2008
  • Expense Ratio: 0.07%
  • Number Of Stocks: 9299
  • Top 10 Holdings: 15%

The Vanguard Total World Stock ETF (VT) exposes investors to developed and emerging equity markets.

The ETF holds companies in North America, Emerging Markets, and Europe.

VT launched in 2008 and currently has an expense ratio of 0.07%.  This expense ratio makes it a low-cost ETF to own.

More importantly, is being able to achieve the asset allocation you desire.  (international vs domestic).

VT’s equal Admiral Fund is the Vanguard Total World Stock Index Fund Admiral Shares (VTWAX).

 

VT Performance

Vanguard’s VT aims to track the FTSE Global All Cap Index, covering international and domestic equities.  VT has the potential for high growth but comes with risks from emerging markets.

Here is VT’s performance chart:

VT Performance Chart

As you can see, VT has had strong growth over the last 10 years.

 

VT Holdings

Moving on, here are the top 10 holdings for VT:

VT Top Holdings

VT is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla.

Over the last 10 years, VT has underperformed the S&P 500 with an average return of 10% per year compared to 16.5% from the S&P 500.

VT has about $32 billion in net assets.

It has underperformed over the last 10 years, but there is no guarantee that the next 10 years will look the same.

 

No Minimum Investment

VXUS and VT are exchange-traded funds (ETFs), so there is no minimum investment.  Investors looking to buy fractional shares can use platforms like M1 Finance. ***(Get $50 When You Use This Link)***

Usually, fractional shares are not available for ETFs, but with M1 Finance, you can purchase fractional shares with no commission.

Buying fractional shares allows you to maximize your investment.  You no longer have to keep your money sitting idle until you have enough to purchase a total share.

This is especially beneficial for stocks with high share prices like Tesla, Amazon, and Google.

 

VXUS Profile

  • Fund Inception: 2011
  • Expense Ratio: 0.07%
  • Number Of Stocks: 7,765
  • Top 10 Holdings: 9%
  • Equivalent Admiral Fund (VTIAX)

Vanguard Total International Stock ETF (VXUS) provides investors with exposure to developed and emerging non-U.S. equity markets.  The ETF is comprised of companies located mostly in emerging markets, Europe, and Pacific markets.

VXUS was created in 2011 and currently has an expense ratio of 0.07%, which makes it a low-cost ETF to own.  It has the same expense ratio as VT (0.07%).

Therefore, there is no difference in the cost of owning VXUS vs VT.  They are low-cost ETF options, so paying attention to performance and desired assets allocation is more critical.  (international vs domestic)

 

VXUS Performance

Vanguard’s VXUS seeks to replicate the performance of the FTSE Global All Cap ex-US Index.

Performance for international equities has lagged U.S. stocks over the last 10 years:

VXUS Performance

Over the last 10 years, VXUS has underperformed the S&P 500 with an average return of 7.9% per year compared to 16.5% from the S&P500.

It has underperformed over the last 10 years, but there is no guarantee that the next 10 years will look the same.

 

VXUS Holdings

Moving on, here are the top 10 holdings for VXUS:

VXUS Top 10 Holdings

VXUS primarily holds Taiwan Semiconductor Manufacturing, Tencent Holdings, Nestle, Samsung, and ASML Holding.

VXUS has $404 billion in net assets.

 

Which Is Better VXUS or VT?

VXUS and VT are different investments.  VXUS offers more international exposure than VT since it excludes United States companies.  However, this has resulted in a lower performance over the last 10 years.

Both can be great options for long-term investors, depending on your investment goals.

If having an asset allocation that only includes international stocks at the lowest fees helps you sleep at night, then VXUS would be a great option.

If you are looking for a more balanced portfolio with both U.S-based and international companies, then VT allows you to easily invest in that asset allocation at a very low cost.

I think both VXUS and VT can have a place in a long-term investors portfolio.

Lastly, it’s important to consider costs and fees because they can add up in the long run.  That’s why it’s so important to purchase and sell your shares commission-free.

Again a great way to do this is with M1 Finance or using the Vanguard platform directly for these ETFs.  You can purchase fractional shares for free with M1 Finance, and they give you the ability to buy VT, VXUS, and thousands of other stocks/ETFs.

Related Posts:

 

Is VXUS or VT Better for Financial Independence?

Both VT and VXUS can get you to Financial Independence Retire Early (FIRE).  They both have low expense ratios and can be combined to achieve your desired asset allocation.

Being part of the FIRE community, I know we aim for the lowest fees possible, and we’re a big fan of Vanguard.

FIRE Calculator

Calculate Your FI Number With My Free FIRE Calculator

 

My Winner: VT

My winner is VT for its diversification in domestic and international stocks.  VT’s expense ratio is also very low.

However, as I mentioned, I believe you can invest in both depending on your desired asset allocation.

Lastly, both ETFs are Vanguard funds which likely means they will continue to offer low-cost ETFs and can be purchased commission-free from the vanguard platform or M1 Finance.

If you like comparisons like these, you can also look at other popular ones like VXUS vs VTIVGT vs QQQ, and VTI vs QQQ.

 


Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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