A Slim Fee ETF Bulging With International Stocks

With international equities outpacing U.S. stocks and luring U.S. investors in the process, investors would do well to remember one of the largest ex-US exchange traded funds: The Vanguard Total International Stock ETF (NASDAQ: VXUS).

VXUS, which holds developed and emerging markets equities, tracks the FTSE Global All Cap ex US Index. Investing in international stocks, whether it be developed or emerging markets, can be tricky. Being properly diversified while avoiding single stock risk is crucial to skirting volatility and producing positive returns over the long-term. Investors who want overseas exposure but are less familiar with foreign companies can use international exchange traded funds to diversify a portfolio.

Home to almost 6,200 stocks, VXUS certainly helps investors stay diversified. The ETF’s holdings have a median market value of $25.5 billion, so VXUS can be viewed as a core large-cap holding for the international portion of an investor’s portfolio.

“The market-cap-weighting approach emphasizes multinational firms that are large and profitable. Companies such as Nestle, Samsung, and Novartis are among this fund’s top holding,” according to Morningstar. “Sector and country allocations are similar to a typical fund in this Morningstar Category, with stocks from Japan representing the largest country allocation, at almost 18% of the portfolio.”

VXUS devotes about 20% of its weight to emerging markets with Europe and developed Asia-Pacific economies combining for 73% of the fund’s weight.