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VXUS affords a better dividend yield and barely decrease expense ratio in comparison with VT
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VT contains U.S. shares whereas VXUS focuses strictly on worldwide equities, leading to totally different sector exposures and prime holdings
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Each funds are extremely liquid and passively managed, however VT has delivered greater five-year progress and shallower drawdowns
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Vanguard Whole World Inventory ETF (NYSEMKT:VT) covers each U.S. and worldwide shares, whereas Vanguard Whole Worldwide Inventory ETF (NASDAQ:VXUS) excludes the U.S., leading to a better yield however better latest volatility and a unique sector tilt.
Each VT and VXUS purpose for broad diversification, however with a key distinction: VT invests throughout your complete globe, together with the U.S., whereas VXUS holds solely non-U.S. shares. For these deciding between the 2, variations in value, latest returns, danger, and portfolio make-up could assist make clear which fund aligns higher with particular investing targets.
|
Metric
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VT
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VXUS
|
|
Issuer
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Vanguard
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Vanguard
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|
Expense ratio
|
0.06%
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0.05%
|
|
1-yr return (as of December 19, 2025)
|
19.0%
|
26.7%
|
|
Dividend yield
|
1.8%
|
3.2%
|
|
Beta
|
1.02
|
1.0
|
|
AUM
|
$74.9 billion
|
$558.2 billion
|
Beta measures worth volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents whole return over the trailing 12 months.
VXUS is barely extra inexpensive with a decrease expense ratio and affords a better dividend yield, which can enchantment to cost-conscious or income-focused buyers.
|
Metric
|
VT
|
VXUS
|
|
Max drawdown (5 y)
|
(28.0%)
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(32.7%)
|
|
Development of $1,000 over 5 years
|
$1,523
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$1,239
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VXUS seeks to copy the efficiency of the FTSE World All Cap ex US Index, holding 8,663 shares throughout developed and rising non-U.S. markets. The fund’s sector combine leans into monetary companies (22%), industrials (16%), and know-how (15%). Its largest positions embrace Taiwan Semiconductor Manufacturing (TWSE:2330), Tencent (SEHK:700), and ASML (ENXTAM:ASML). With a fund age of almost 15 years, VXUS offers deep worldwide diversification with out U.S. publicity.
In distinction, VT invests in each U.S. and overseas corporations, with its largest allocation to know-how (28%), adopted by monetary companies (16%) and industrials (11%). Its prime holdings are NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT), providing publicity to among the world’s largest tech companies. This international strategy ends in a unique sector mix and efficiency profile than VXUS.
For extra steerage on ETF investing, take a look at the total information at this hyperlink.
The very first thing buyers ought to know is that, as a result of these are each Vanguard funds, the charges are typically low, and on this case, they’re comparable as effectively. That mentioned, VXUS stands out as probably extra engaging for just a few causes. First, it carries a barely decrease charge than VT, nevertheless it has additionally carried out higher over the previous twelve months, and its dividend yield is considerably greater.
Nevertheless, these elements shouldn’t be the one factor buyers take note of, as these ETFs are essentially totally different of their composition. VT carries publicity to the equities from world wide, which features a 63% publicity to shares from the USA. This may very well be a gorgeous characteristic for these searching for worldwide publicity, along with the chance to spend money on U.S. shares.
However, VXUS is a fund that particularly invests solely in markets exterior the USA. This fund may very well be acceptable for many who have a heavy publicity to U.S. equities in different components of their portfolio and are on the lookout for a straightforward technique to acquire diversified publicity to worldwide markets.
Contemplating these substantial variations, a choice between the 2 funds ought to lengthen past efficiency and dividend yield. Every of those ETFs can serve a particular position in a portfolio and must be thought-about based mostly on what every investor is making an attempt to perform.
ETF: Alternate-traded fund; a pooled funding fund that trades on inventory exchanges like a single inventory.
Expense ratio: The annual charge, as a share of belongings, {that a} fund fees to cowl working prices.
Dividend yield: Annual dividends paid by a fund or inventory, expressed as a share of its present worth.
Beta: A measure of an funding’s volatility in comparison with the general market, sometimes the S&P 500.
AUM: Belongings underneath administration; the whole market worth of belongings a fund manages for buyers.
Max drawdown: The biggest share drop from a fund’s peak worth to its lowest level over a particular interval.
Sector publicity: The proportion of a fund’s holdings invested in particular industries or sectors.
Passively managed: A fund that goals to copy the efficiency of an index quite than actively choosing investments.
Index: A benchmark that tracks the efficiency of a gaggle of securities, equivalent to shares or bonds.
Developed markets: Nations with superior economies and established monetary markets, just like the US, UK, or Japan.
Rising markets: Nations with creating economies and fewer mature monetary markets, usually providing greater progress potential.
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Jeff Santoro has positions in ASML, Apple, Microsoft, and Nvidia. The Motley Idiot has positions in and recommends ASML, Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Tencent, and Vanguard Whole Worldwide Inventory ETF. The Motley Idiot recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
VXUS vs. VT: World Publicity With Main Variations was initially revealed by The Motley Idiot
