The Vanguard Total International Stock ETF (VXUS) has garnered attention for its performance relative to the S&P 500, rising approximately 77% over the past decade compared to the S&P’s 238%. While this may seem disappointing, VXUS fulfills its purpose by offering broad exposure to nearly 8,800 companies outside the U.S., making it a strategic choice for investors looking to diversify their portfolios. Notably, VXUS has outperformed the S&P 500 by over 5% this year, highlighting its potential as a hedge during U.S. market downturns.
Investors should consider that while VXUS may lag behind the S&P 500 in growth, it provides a balanced mix of developed and emerging markets, which can mitigate geopolitical and currency risks. Its low expense ratio of 0.05% and a dividend yield of 2.8% further enhance its appeal, especially compared to other dividend-focused ETFs.
Incorporating VXUS into a portfolio can be a prudent strategy, allowing investors to maintain core U.S. holdings while gaining exposure to international markets, thus achieving a more well-rounded investment approach.
Source: fool.com