VEA charges 0.07% per year, or $7 on a $10,000 investment, making it one of the least expensive international ETFs on the market. However, some rival funds have comparable or lower fees. That could be a sign that, in the future, Vanguard could reduce VEA’s expense ratio.
Besides the low fee, there are other advantages in owning a fund such as VEA.
“Foreign stocks can diversify portfolios that have heavy exposure to U.S. equities. However, this diversification benefit tends to be lower among foreign developed-markets stocks compared with emerging-markets stocks,” according to Morningstar. “During the trailing 10-year period through September 2017, the correlation between the S&P 500 and the MSCI World ex USA Index, which also tracks foreign developed markets, was 0.90. During the same period, the correlation between the S&P 500 and the MSCI Emerging Markets Index was 0.80. Although the diversification benefit may not be as great for foreign developed-markets stocks, they have historically exhibited lower volatility than emerging-markets stocks.”
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