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Vanguard’s International ETF Tops U.S. Peers, Reviving Diversification Push

Concentration in a few tech giants is pushing investors to seek broader exposure.

Overview

  • The Vanguard Total International Stock ETF returned about 40% over the past year, outpacing the Vanguard S&P 500 and Total Stock Market ETFs at roughly 32% as of April 16.
  • VXUS holds non-U.S. stocks, giving investors instant geographic diversification in a single low-cost fund.
  • Many savers still default to S&P 500 trackers, with Vanguard and iShares funds holding more than $1.6 trillion combined.
  • The S&P 500’s top 10 positions make up about 38% of the index, leaving portfolios more tied to a handful of large tech names.
  • Coverage argues that adding assets beyond U.S. large caps—such as small and mid caps, international stocks, bonds, or gold—can spread risk, even as the S&P 500 has averaged about 10% a year over the long run.