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VXUS vs VTI: Which Is The Best Vanguard ETF? (Full Comparison)

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We will explore the difference between Vanguard Total International Stock ETF (VXUS) vs Vanguard Total Stock Market ETF (VTI).

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 for you to decide between VXUS and VTI.

VXUS vs VTI Graphic

 

VXUS vs VTI

The primary difference between VXUS and VTI is the asset allocation of the exchange-traded fund (ETF).  VXUS is a collection of stocks from companies around the world except for the United States.  VTI holds almost all U.S based companies.

Another significant difference is the number of stocks in each, with VTI having 3535 different companies in the index compared to 7765 with VXUS.

VTI

  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • No Minimum Investment
  • Holds 3535 Stocks

VXUS

  • Tracks the FTSE Global All Cap ex-US Index
  • Expense Ratio: 0.07%
  • No Minimum Investment
  • Holds 7765 Stocks

 

VXUS vs VTI Performance

Vanguard’s VXUS and VTI have performed very differently over the last 10 years, with VTI beating VXUS by more than 8% annually.

VXUS vs VTI Performance Comparison

 

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

Here is how their performance compares:

VXUS vs VTI Performance

VXUS (Blue)          VTI (Yellow)

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

Similarities between VXUS and VTI:

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

 

VXUS and VTI Differences

VXUS vs VTI primarily differ in that VTI holds almost all U.S-based companies, while VXUS holds a collection of stocks from companies around the world except for the United States.  VTI also has fewer holdings in the index compared to VXUS.

VXUS vs VTI Comparison Chart

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

Differences between VXUS and VTI:

  • Different Number Of Holdings (7765 vs 3535)
  • Expense Ratio (0.07% vs 0.03%)
  • Level Of Diversification

 

VTI Description

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3535
  • Admiral Shares (VTSAX)

Vanguard Total Stock Market ETF (VTI) represents close to 100% of the U.S. equity market.

It also tracks the CRSP U.S. Total Market Index.

Vanguard’s VTI has an expense ratio of 0.03%.

This implies that the fund has limited exposure to several international stocks.

Yet, this does not affect the companies represented in the fund.

Moreover, these stocks have a significant international presence.

 

VTI Performance

Vanguard Total Stock Market ETF (VTI) is famous for so many reasons, of which consistent returns are a significant part.

VTI Performance Chart

Its risk level is similar to that of the S&P 500.

VTI vs S&P 500 Performance Chart

 

VTI Holdings

Vanguard’s VTI is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3500 stocks.

Here are the top 10 holdings for VTI:

VTI Top Holdings

Major sectors in the index include:

  • Technology
  • Healthcare
  • Consumer Services
  • Financials
  • Industrials

The top 10 holdings make up 25% of its total net assets.

 

No Minimum Investment

VXUS and VTI 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)

Typically, 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 when it comes to shares of VTI due to its high prices per share (~$238/Share).

I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.

Personal Capital Retirement Fee Analyzer

Personal Capital’s free tools allow you to easily find which of your investments has high fees so that you can switch them to low-cost options.  (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)

 

VXUS Profile

  • Fund Inception: 2011
  • Expense Ratio: 0.07%
  • Number Of Stocks: 7765
  • Top 10 Holdings: 9%

The Vanguard Total International Stock ETF (VXUS) provides investors with exposure to developed and emerging non-U.S. equity markets.

The ETF comprises 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.  However not as low as VTI (0.03% expense ratio).

However, the cost of owning VXUS over VTI won’t likely make a significant difference to an investor since they are both low-cost ETFs.

More importantly, is being able to achieve the asset allocation you desire as an investor (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 is largely made up of Taiwan Semiconductor Manufacturing, Tencent Holdings, Nestle, Samsung, and ASML Holding.

VXUS has $404 billion in net assets.

 

Which Is Better VXUS or VTI?

VXUS and VTI are different investments.  VXUS offers more diversification since it holds about twice as many stocks.  However, this has resulted in a lower performance over the last 10 years.

Even so, I would say both are excellent options for long-term investors.

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

If you are looking for only U.S-based companies, then VTI allows you to easily invest in all of them at a very low cost.

I think both VXUS and VTI 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 VTI, VXUS, and thousands of other stocks/ETFs.

Related Posts:

 

Is VXUS or VTI Better for Financial Independence?

Both VTI and VXUS can get you to Financial Independence Retire Early (FIRE).  They both have performed great and have low expense ratios.

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

 

VXUS vs VTI Winner

My Winner: VTI

If I have to choose one winner, it’s VTI for its diversification, lower expense ratio, and because of books like The Simple Path To Wealth.

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.

If you like comparisons like these, you can also look at other popular ones like VTI vs VOO, VGT vs QQQ, VTI vs VUG, 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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