International stocks have steadily lagged the S&P 500 for the last 15 years. That kind of chronic underperformance doesn't build a good reputation and it certainly doesn't inspire investors to throw their money at it. Many people will label the Vanguard Total International Stock ETF (NASDAQ: VXUS) (or any international fund for that matter) a "bad" fund. But you can't call a fund bad if you only look at it through the lens of performance. It ignores how the portfolio is structured, what its core strategy ...

Outperformance Was Elusive For Active Managers in 2025Almost [1,000 active ETFs] launched in 2025, but did their performance substantiate the demand? Across the universe of funds, active managers for ETFs and mutual funds found that outperformance was elusive compared to their passive peers based on the latest [Morningstar US Active/Passive Barometer report].Only 38% of actively managed ETFs as well as mutual funds survived and outperformed their passive counterparts in 2025. This represented a 4% drop in p ...

Under normal circumstances, U.S. investors maintain a home bias. People generally want to invest in what they know. That means they focus heavily on U.S. ETFs, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the Vanguard Total Stock Market ETF (NYSEMKT: VTI). They're told they should have international stocks in their portfolio, but many avoid the overseas market altogether. Total returns over the past decade have made the case for international investing that much harder given how that group has unde ...

Core Insights - The U.S. stock market is underperforming in 2026, with the S&P 500 index down 0.03% and the Nasdaq-100 index down 2.2% year to date [1] - In contrast, international stocks are showing strong performance, with the Vanguard Total International Stock ETF (VXUS) up 9% year to date and 31% over the past year, significantly outperforming U.S. benchmarks [2][3] Group 1: International Stock Performance - The Vanguard Total International Stock ETF (VXUS) has outperformed the S&P 500 index and Nasdaq-100 index, with a 31% increase over the past year compared to 12% and 11.7% respectively [2] - Vanguard's research suggests that international stocks may continue to outperform U.S. stocks in the foreseeable future, indicating a potential shift in investment strategy [3] Group 2: Vanguard's Economic Outlook - Vanguard's 2026 economic and market outlook predicts average annual returns of 4.9%-6.9% for international stocks over the next decade, compared to 4%-5% for U.S. equities [4] - This forecast suggests that international stocks could significantly outperform U.S. stocks in the coming years, marking a notable change from the past 16 years where U.S. stocks dominated [5] Group 3: U.S. Stock Market Analysis - Vanguard's cautious stance on U.S. stocks is attributed to the belief that U.S. tech stocks are already priced for high earnings expectations, leaving limited upside potential [6] - Instead of focusing on tech stocks, Vanguard recommends considering high-quality U.S. bonds, U.S. value stocks, and international equities from developed markets [7]

Core Insights - The Vanguard Total International Stock ETF (VXUS) includes emerging markets, while the iShares Core MSCI EAFE ETF (IEFA) focuses solely on developed markets outside the U.S. and Canada [1][2] Cost & Size Comparison - VXUS has an expense ratio of 0.05% and assets under management (AUM) of $606 billion, while IEFA has a slightly higher expense ratio of 0.07% and AUM of $178 billion [3][4] - The 1-year return for VXUS is 35.7%, compared to IEFA's 32.9%, and the dividend yield for VXUS is 2.91%, while IEFA offers a higher yield of 3.27% [3][4] Performance & Risk Analysis - Over the past five years, VXUS experienced a maximum drawdown of 29.44%, while IEFA had a slightly higher drawdown of 30.37% [5] - An investment of $1,000 would have grown to $1,504 in VXUS and $1,580 in IEFA over the same period [5] Portfolio Composition - VXUS holds 8,691 stocks, with significant positions in Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, and ASML Holding NV, providing geographic diversification with 38% in Europe, 27% in emerging markets, 25% in the Pacific, and 8% in North America [6] - IEFA contains 2,589 developed-market stocks, with major holdings in ASML Holding NV, Roche Holding AG, and AstraZeneca Plc, offering a stable composition for investors avoiding emerging-market risks [7] Investment Implications - Both ETFs are low-cost options for gaining international stock exposure, with improving global economic conditions and a weaker dollar potentially driving growth in international stocks in 2026 [8] - IEFA may be more suitable for the current bull market due to its recent outperformance and higher dividend yield, along with its focus on economically stable developed markets [8][9]

Core Insights - Vanguard Total International Stock ETF (VXUS) includes emerging markets, while iShares Core MSCI EAFE ETF (IEFA) focuses solely on developed markets, offering a marginally higher yield and lower volatility [1][2] Cost & Size Comparison - VXUS has an expense ratio of 0.05% compared to IEFA's 0.07% - As of January 30, 2026, VXUS has a 1-year return of 29.5% and a dividend yield of 3.1%, while IEFA has a 1-year return of 26.6% and a dividend yield of 3.5% - VXUS has assets under management (AUM) of $573.7 billion, significantly higher than IEFA's $162.6 billion [3][4] Performance & Risk Comparison - Over the past five years, VXUS experienced a maximum drawdown of -29.43%, while IEFA had a drawdown of -30.41% - An investment of $1,000 would have grown to $1,297 in VXUS and $1,353 in IEFA over the same period [5] Fund Composition - IEFA holds 2,589 stocks from developed markets, with major sectors being financial services (22%), industrials (20%), and healthcare (11%), featuring top positions like ASML, Roche, and HSBC [6] - VXUS contains over 8,600 stocks from both developed and emerging markets, with significant exposure to financial services, industrials, and technology, including major positions like Taiwan Semiconductor Manufacturing, Tencent, and ASML [7][9] Market Performance Context - International stocks surged over 30% in 2025, significantly outperforming U.S. markets, driven by a weaker dollar and attractive valuations abroad, with both VXUS and IEFA benefiting from these gains [8] - VXUS provides a broader investment scope, capturing both developed and emerging markets, while IEFA selectively focuses on developed markets, trading off higher growth potential for reduced risk [10]

For most of the past 15 years, the U.S. stock market has been the envy of the world. Since the start of 2011, the S&P 500 index is up 441%, while the tech-heavy Nasdaq-100 is up by more than 1,000%. Equity markets in the rest of the world have also grown, but at paces that have lagged Wall Street. The share price of the Vanguard Total International Stock ETF (NASDAQ: VXUS), which tracks stock markets outside the U.S., is up by only 62% in the past 15 years. Even on a total return basis (factoring in the r ...

Group 1 - The S&P 500 index has achieved its third consecutive year of over 15% total returns and is up 2% at the start of 2026, but U.S. stocks are now historically expensive with a P/E ratio exceeding 28 for the Vanguard S&P 500 ETF and almost 39 for the Vanguard Information Technology ETF [1] - Investors are increasingly shifting towards value-oriented stocks, including defensive sectors like consumer staples and utilities, as well as low-volatility stocks and small caps, while also exploring opportunities in international markets [2] Group 2 - International stocks are trading at significant discounts compared to the S&P 500, with the Vanguard Total International Stock ETF having a P/E ratio of 17, making it approximately 40% cheaper than the S&P 500, and are expected to outperform due to stronger growth profiles and favorable monetary policies [3][4] - The IMF projects U.S. economic growth at 2.4% for 2026, which is better than the Eurozone and Japan, but emerging markets are anticipated to see the highest growth at 4.2%, particularly in Asia, which is crucial for AI development [5] - Investing in international stocks diversifies away from the tech-heavy S&P 500, with the Vanguard Total International Stock ETF's top sector holdings being financials (23%), industrials (15%), technology (14%), and consumer discretionary (10%), allowing for a broader exposure to cyclicals while maintaining some growth allocation [6]

Core Insights - The SPDR Portfolio Developed World ex-US ETF (SPDW) and Vanguard Total International Stock ETF (VXUS) provide broad international exposure, with SPDW focusing on developed markets and VXUS including both developed and emerging markets [2] Cost & Size Comparison - VXUS has an expense ratio of 0.05% and AUM of $573.72 billion, while SPDW has a lower expense ratio of 0.03% and AUM of $35.07 billion [3] - The 1-year return for VXUS is 31.69% compared to SPDW's 32.6%, and the dividend yield for VXUS is 3.02% versus SPDW's 3.14% [3][4] Performance & Risk Metrics - Over five years, VXUS has a max drawdown of -29.43% and a growth of $1,000 to $1,256, while SPDW has a max drawdown of -30.20% and a growth of $1,000 to $1,321 [5] Holdings Overview - SPDW holds 2,413 stocks with a sector tilt towards financials, industrials, and consumer cyclical, featuring top holdings like ASML Holding N.V., Samsung Electronics, and Roche Holding AG [6] - VXUS is broader with 8,673 holdings, including top positions such as Taiwan Semiconductor Manufacturing Company Ltd., Tencent Holdings Ltd., and ASML Holding N.V. [7] Investor Considerations - International stocks in these ETFs may exhibit different price movements compared to U.S. stocks, influenced by the economic and political conditions of the respective countries [8] - SPDW's top holdings are primarily European, while VXUS has a significant presence in Asian companies, indicating different regional exposures [10]

Core Insights - Vanguard is a leading producer of exchange-traded funds (ETFs), offering over 80 options, including popular ones like the Vanguard S&P 500 and Vanguard Growth ETF, as well as lesser-known ETFs that can enhance investment portfolios [1]. Group 1: Vanguard Dividend Appreciation ETF - The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) focuses on companies that have consistently increased their annual dividend payouts for at least 10 consecutive years, avoiding the top 25% highest-yielding companies to prevent yield traps [3]. - VIG has a dividend yield of 1.6%, which is lower than many other dividend ETFs, but it emphasizes long-term growth potential rather than immediate yield [4]. - Notable holdings in VIG include companies like Broadcom, Microsoft, Apple, Visa, and Walmart, which have shown consistent dividend increases over the years [4]. Group 2: Vanguard Total International Stock ETF - The Vanguard Total International Stock ETF (NASDAQ: VXUS) provides exposure to both developed and emerging markets, making it a strategic choice for diversifying portfolios and hedging against U.S. economic downturns [7]. - Developed markets include countries with established industries and mature financial systems, while emerging markets are characterized by rapid growth and industrialization but may lack some infrastructure [8].