A Slim Fee ETF Bulging With International Stocks

“The composition of foreign index-tracking funds is different than those that invest in U.S. stocks and therefore can help diversify a portfolio of U.S. stocks,” according to Vanguard. “Because these funds hold companies that are not listed in the U.S., they can expand the investment opportunity set. Sector composition is also notably different from the broader U.S. market. This fund has higher allocations to firms from the basic-materials and financial sectors, and less in healthcare and technology compared with the Russell 3000 Index.”

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As is the case with many Vanguard ETFs, VXUS comes with a modest fee. The ETF charges just 0.11% per year, or $11 on a $10,000 investment, making it cheaper than 90% of competing funds, according to issuer data.

Vanguard recently cut the fund’s expense ratio to 0.11% from 0.12%. This is one of the lowest fees in the foreign large-blend Morningstar Category, supporting a Positive Price Pillar rating, notes Morningstar. “Holdings are weighted by market capitalization, which keeps turnover and the associated transaction costs in check. The last reported turnover ratio landed in the bottom decile of the category. This fund also engages in securities lending, which helps offset its expenses.”

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