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Vanguard Total International Stock Index Fund ETF Shares

VXUS:NASDAQ

equity ETF | passive | Vanguard | Tracks FTSE

Market Price

US$79.86 (26 Jan 2026)

+32.35% (YoY)

NAV

US$79.40

+0.58% Premium

Yield

3.18%

-19.90% (YoY)

Expense Ratio

5.00%

-94% vs Avg: 85.00%

Box Set (ETF)

⚡ Executive Summary

📊 The Bottom Line

This ETF offers broad exposure to a market-capitalization-weighted index of global stocks outside the United States, spanning both developed and emerging markets. It is a highly cost-efficient and broadly diversified vehicle for international equity allocation. The bull case projects an NAV of US$99.83 (+25%) while the bear case suggests US$63.88 (-20%) over the next 12-18 months.

⚖️ Risk vs Reward

International equities are currently trading at more attractive valuations compared to their U.S. counterparts, with VXUS's holdings at an aggregate P/E of 17.1x, which is below global averages. While foreign markets have shown strong performance, notably in 2025 where VXUS outperformed the S&P 500, they remain susceptible to global macroeconomic headwinds and currency fluctuations. The potential for continued outperformance against the U.S. is a key upside, balanced by geopolitical risks and slower global growth in some regions.

🚀 Why VXUS Could Soar

• Undervalued international markets could see multiple expansion as global growth stabilizes, driving up the value of underlying holdings by 15-20%.
• Continued U.S. dollar weakening could boost foreign currency-denominated asset values, adding an estimated 5-10% to returns over 12 months.
• Emerging markets, representing a significant portion of VXUS, could experience a growth resurgence, adding 10-15% to portfolio returns.

⚠️ What Could Go Wrong

• A global economic slowdown or recession could depress international corporate earnings, leading to a 15-20% decline in equity values.
• A strengthening U.S. dollar could erode foreign investment returns, potentially detracting 5-10% from performance.
• Geopolitical tensions, particularly in key emerging markets like China, could create significant market instability and drag down returns by 10-15%.

🏢 Fund Overview

What Are You Actually Buying

The international equity market comprises companies headquartered outside the United States, offering diversification from domestic-centric portfolios. These markets vary widely in economic development, regulatory environments, and growth drivers.
This market segment includes both developed economies (e.g., Europe, Japan, Canada) with mature industries and stable governance, and emerging markets (e.g., China, India, Brazil) characterized by rapid growth, higher volatility, and evolving financial systems.
International equities can play a crucial role in a diversified portfolio by providing exposure to different economic cycles and potentially uncorrelated returns, often exhibiting distinct valuation characteristics and growth trajectories compared to U.S. stocks.

Market Dynamics & Outlook

International markets currently exhibit more attractive valuations compared to the U.S., with VXUS's underlying holdings trading at a P/E of 17.1x, providing a potential entry point for long-term investors.
Many foreign economies are showing signs of recovering global trade and stabilizing inflation, which could support corporate earnings growth in the coming quarters.
Geopolitical factors and central bank policies in major economies like Europe and Asia will continue to heavily influence market performance, with ongoing uncertainties impacting investor sentiment and capital flows.

🎯 Why This Matters

Understanding the international equity landscape is vital for diversification, offering access to growth beyond domestic borders and potentially attractive valuations. However, investors must consider the inherent complexities of diverse economies, currencies, and geopolitical risks that can significantly influence returns.

📈 Valuation & Analysis

Historical Performance

YTD

+5.86%

+35.17%

Yearly Growth (3Y)

+16.04%

Yearly Growth (5Y)

+8.07%

Yearly Growth (10Y)

+9.77%

Yearly Growth (Since Inception)

+5.97%

Current Valuation

The Vanguard Total International Stock ETF’s holdings trade at an aggregate price-to-earnings (P/E) ratio of 17.1x and a price-to-book (P/B) ratio of 2.1x as of December 31, 2025. These valuations are generally considered reasonable within the context of historical international equity markets and offer a discount compared to U.S. equity valuations. The current dividend yield of 3.18% further enhances its attractiveness, providing an income component along with capital appreciation potential.

The Bull Case - Upside to

Global Economic Recovery Fuels Earnings Growth

Medium Probability

A synchronized global economic rebound could drive earnings growth for international companies by an average of 10-15% over the next 12-18 months. If P/E ratios remain stable, this implies a 10-15% increase in NAV. Bull NAV target: US$99.83 (+25%).

Attractive Valuations Lead to Multiple Expansion

Medium Probability

If international market valuations catch up to historical averages or narrow the discount to U.S. markets, P/E ratios could expand by 10-15%, contributing to an additional 5-10% NAV appreciation.

Weakening U.S. Dollar Boosts Foreign Returns

Probability

Further depreciation of the U.S. dollar by 5-7% against major currencies could directly translate into an equivalent percentage gain for dollar-denominated VXUS returns, adding to NAV growth.

The Bear Case - Downside to

Persistent Inflation and Aggressive Monetary Tightening

Medium Probability

If global inflation remains stubbornly high, forcing central banks to maintain aggressive tightening, it could trigger a global recession, leading to a 15-20% drop in international equity valuations. Bear NAV target: US$63.88 (-20%).

Geopolitical Instability and Trade Wars

Medium Probability

Escalating geopolitical conflicts or renewed trade tensions could disrupt global supply chains and dampen international business sentiment, resulting in a 10-15% decline in corporate profits and share prices.

Strong U.S. Dollar Creates Headwinds

Medium Probability

A resurgence in U.S. dollar strength, driven by safe-haven demand or divergence in economic growth, could negatively impact foreign currency-denominated returns by 5-10%.

Risk/Reward Assessment

The risk/reward profile for VXUS appears balanced with a potential for significant upside driven by undervalued international markets and a possible weakening of the U.S. dollar. Global economic recovery and multiple expansion could act as strong catalysts. However, investors must remain mindful of substantial risks, including the potential for a global recession, geopolitical instability, and adverse currency movements. The fund's broad diversification across numerous countries and thousands of holdings helps mitigate single-country or single-stock risks, but the overall international market remains sensitive to macro-level events. For long-term investors seeking broad international diversification at a low cost, the current entry point may offer an attractive proposition, assuming a tolerance for market volatility inherent in global equities.

Peer Comparison

• VXUS stands out for its exceptionally low expense ratio of 0.05%, significantly undercutting many category peers and maximizing long-term investor returns. • It offers broader diversification with over 8,600 holdings across developed and emerging markets, providing comprehensive international exposure. • The fund has a competitive dividend yield of 3.18%, which is generally higher than some similar broad international ETFs. • While its performance metrics align closely with peers, its lower cost structure provides a persistent advantage over time, making it a compelling choice for core international allocation.

Fund	Expense Ratio	AUM (B)	1Y Return	3Y Return	5Y Return	Yield
Vanguard Total International Stock Index Fund ETF Shares (VXUS) ⭐	5.00%	US$120.7B	35.17%	16.04%	8.07%	3.18%
Vanguard FTSE Developed Markets ETF (VEA)	3.00%	US$200.2B	N/A	N/A	N/A	N/A
Vanguard FTSE All-World ex-US ETF (VEU)	8.00%	US$56.1B	N/A	N/A	N/A	N/A
iShares MSCI ACWI ex US ETF (ACWX)	32.00%	US$8.4B	34.20%	N/A	46.40%	2.70%

🎯 Why This Matters

The valuation and performance analysis reveal that VXUS offers a compelling, low-cost gateway to international equity markets. Its broad diversification reduces idiosyncratic risks, making it a robust option for investors prioritizing global exposure and cost efficiency. However, macro-level economic and geopolitical factors will remain crucial determinants of its performance, necessitating careful monitoring.

📊 Appendix

Top 10 Holdings (80+ of ETF Value)

#	Ticker	Logo	Name	Sector	Weight
1	TSM	T	Taiwan Semiconductor Manufacturing Co., Ltd.	Technology	3.0%
2	00700.HK	T	Tencent Holdings Ltd	Communication Services	1.2%
3	ASML.AS	A	ASML Holding NV	Technology	1.1%
4	005930.KS	S	Samsung Electronics Co. Ltd.	Technology	1.0%
5	9988.HK	A	Alibaba Group Holding Ltd	Consumer Cyclical	0.8%
6	ROG.SW	R	Roche Holding AG	Healthcare	0.7%
7	AZN.L	A	AstraZeneca PLC	Healthcare	0.7%
8	HSBA.L	H	HSBC Holdings Plc	Financials	0.7%
9	NOVN.SW	N	Novartis AG	Healthcare	0.7%
10	NESN.SW	N	Nestle S.A.	Consumer Defensive	0.6%

Fund Mechanics

How It Works

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) employs a passive, indexing investment approach designed to track the performance of the FTSE Global All Cap ex US Index. This index is a float-adjusted market-capitalization-weighted benchmark that measures the equity market performance of companies located in developed and emerging markets, excluding the United States. By using a full replication technique, the fund aims to hold all the stocks in the index in approximately the same proportions as their weighting in the index. The FTSE Global All Cap ex US Index covers approximately 98% of the world's investable market capitalization outside the U.S. and is reviewed and rebalanced semi-annually in March and September. This methodology ensures broad, diversified exposure to a vast universe of international companies, from large to small-cap, in proportion to their market size. The passive management style contributes to the fund's low expense ratio, as it minimizes trading activity and research costs associated with active management.

Holdings Breakdown

Number of Holdings

8646

Top 10 Concentration

1183.0%

Turnover Rate

440%

Category	Weight	Description
Asia Pacific	45.6%	Includes major developed and emerging Asian markets
Europe	41.3%	Comprises developed European economies
North, Central and South America (ex-US)	10.2%	Covers Canada and Latin American markets
Emerging Markets	26.8%	A subset of regions, representing rapidly developing economies
Financial Services	23.4%
Industrials	15.7%
Technology	14.8%
Consumer Cyclical	9.9%
Healthcare	7.8%
Basic Materials	7.4%
Consumer Defensive	5.5%
Communication Services	5.2%
Energy	4.4%
Utilities	3.1%
Real Estate	2.8%

Cost Efficiency

Expense Ratio

5.00%

Median Bid-Ask Spread

1.000%

Metric	1 Year	3 Year	5 Year
Tracking Error	N/A	N/A	N/A
Tracking Difference	28.00%	-12.00%	-6.00%

Expense Ratio History

Year	Expense Ratio
2025	5.00%

Performance History

Year	ETF Return	Benchmark Return	Tracking Diff	Volatility	Max Drawdown	Sharpe Ratio
2025	32.35%	31.95%	0.40%	N/A	N/A	N/A
2024	5.09%	5.53%	-0.44%	N/A	N/A	N/A
2023	15.92%	15.79%	0.13%	N/A	N/A	N/A
2022	-16.13%	-16.10%	-0.03%	N/A	N/A	N/A
2021	9.00%	8.84%	0.16%	N/A	N/A	N/A
2020	10.71%	11.24%	-0.53%	N/A	N/A	N/A
2019	21.84%	21.80%	0.04%	N/A	N/A	N/A
2018	-14.49%	-14.61%	0.12%	N/A	N/A	N/A
2017	27.49%	27.41%	0.08%	N/A	N/A	N/A
2016	4.71%	4.72%	-0.01%	N/A	N/A	N/A
2015	-4.10%	-4.29%	0.19%	N/A	N/A	N/A

Annualized Return Since Inception

5.97%

Detailed Peer Comparison

Ticker	Name	Issuer	Exp Ratio	AUM (B)	1Y	3Y	5Y	Yield	StdDev 3Y	Sharpe 3Y	Spread
VXUS ⭐	Vanguard Total International Stock Index Fund ETF Shares	Vanguard	5.00%	US$120.7B	35.2%	16.0%	8.1%	3.18%	N/A	0.77	1.000%
VEA	Vanguard FTSE Developed Markets ETF	Vanguard	3.00%	US$200.2B	N/A	N/A	N/A	N/A	N/A	N/A	N/A
VEU	Vanguard FTSE All-World ex-US ETF	Vanguard	8.00%	US$56.1B	N/A	N/A	N/A	N/A	N/A	N/A	N/A
ACWX	iShares MSCI ACWI ex US ETF	iShares	32.00%	US$8.4B	34.2%	N/A	46.4%	2.70%	N/A	N/A	N/A
Category Average			85.00%	—	N/A	N/A	N/A	3.02%	—	N/A	—

Risk Metrics

Beta

0.79

R-Squared

0.98

Standard Deviation

1 Year	3 Years	5 Years	10 Years
5.84%	N/A	N/A	14.32%

Sharpe Ratio

1Y	3Y	5Y	10Y
2.28	0.77	0.58	0.58

Sortino Ratio

3 Years	5 Years
1.28	0.59

Maximum Drawdown

1 Year	3 Years	5 Years	Since Inception
N/A	N/A	-29.43%	-35.97%

Correlations

Liquidity & Trading

Volume

Avg Daily Shares

9,710,869

Avg Daily Dollar Volume

US$0.0M

Trend

stable

Bid-Ask Spread

Metric	Value
Median (Percent)	1.000%
Median (Dollar)	N/A
During Hours	N/A
At Close	N/A
Volatility	low

Premium/Discount to NAV

Metric	Value
Current	16.00%
30-Day Average	20.00%
1-Year Average	N/A
Standard Deviation	N/A
Max Premium (1Y)	38.00%
Max Discount (1Y)	0.00%

Creation/Redemption Activity

Trend

string

Net Flows

Period	Net Flow

⚠️ Disclaimer: This ETF research report is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell securities. EC² Invest is not a registered investment advisor. All data is sourced from public sources and may contain errors. Past performance does not guarantee future results. ETF investing involves risk, including possible loss of principal. Always conduct your own research and consult with a qualified financial professional before making investment decisions.