VXUS vs. VT: Go International-Only or Include U.S. Stocks?
Key Points
VXUS has delivered a higher one-year return and yield than VT, but experienced a steeper five-year drawdown.
Both funds offer broad global diversification, but VT includes U.S. stocks while VXUS excludes them.
Expense ratios are nearly identical, making cost differences negligible for most investors.
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Vanguard Total World Stock ETF (NYSEMKT:VT) covers both U.S. and international equities, while Vanguard Total International Stock ETF (NASDAQ:VXUS) focuses solely on non-U.S. stocks, leading to notable differences in recent returns, yield, and sector exposure.
Both Vanguard Total World Stock ETF (VT) and Vanguard Total International Stock ETF (VXUS) are designed for investors seeking low-cost, broad-market exposure, but their approaches diverge: VT holds stocks from around the world including the United States, while VXUS intentionally omits U.S. companies to concentrate on developed and emerging international markets. This comparison highlights how these differences play out in cost, performance, and portfolio makeup.
Snapshot (cost & size)
| Metric | VT | VXUS |
|---|---|---|
| Issuer | Vanguard | Vanguard |
| Expense ratio | 0.06% | 0.05% |
| 1-yr return (as of Dec. 16, 2025) | 15.2% | 22.7% |
| Dividend yield | 1.7% | 2.7% |
| Beta | 1.02 | 1.01 |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
VXUS is slightly more affordable than VT with a lower expense ratio, and it also offers a higher yield over the past year, making it appealing for cost-conscious investors who value income.
Performance & risk comparison
| Metric | VT | VXUS |
|---|---|---|
| Max drawdown (5 y) | (26.38%) | (29.44%) |
| Growth of $1,000 over 5 years | $1,520 | $1,247 |
What's inside
Vanguard Total International Stock ETF (VXUS) delivers exposure to 8,663 international stocks. Its top holdings include Taiwan Semiconductor Manufacturing (NYSE:TSM), Tencent (OTC:TCEHY), and ASML (NASDAQ:ASML). The fund has a nearly 15-year track record and aims to replicate the performance of the FTSE Global All Cap ex US Index, providing broad coverage of both developed and emerging markets outside the United States.
In contrast, VT spans 9,957 stocks across both U.S. and international markets. Its largest positions are Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT), reflecting the weight of the U.S. tech sector in global indices. This broader scope means VT captures both domestic and international equity trends.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The choice between these two Vanguard ETFs comes down to whether you want U.S. exposure in your global holdings.
VXUS excludes U.S. stocks entirely, tracking international markets across developed and emerging economies with over 8,700 holdings. It charges a 0.05% expense ratio and offers a 2.73% dividend yield. This ETF works well if you already own U.S.-focused funds and want to add international diversification separately.
VT takes a different approach by holding the entire world, including U.S. stocks. With roughly 62% allocated to domestic companies and 37% to international markets, it offers one-stop global exposure through nearly 10,000 holdings. Its 0.06% expense ratio is nearly identical to VXUS, though its dividend yield is lower at 1.66%.
Both funds track market-cap-weighted indexes and skew toward large-cap companies. Your choice depends on whether you're building a complete portfolio from scratch (where VT shines) or adding international exposure to existing U.S. holdings (where VXUS makes more sense).
Glossary
ETF: Exchange-traded fund; a pooled investment that trades on stock exchanges like a single stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Dividend yield: Annual dividends paid by a fund or stock, expressed as a percentage of its current price.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
Max drawdown: The largest observed loss from a fund's peak value to its lowest point over a specific period.
AUM: Assets under management; the total market value of assets a fund manages for investors.
Developed markets: Countries with advanced economies, stable governments, and established financial systems.
Emerging markets: Nations with growing economies and developing financial markets, often riskier but with higher growth potential.
Sector exposure: The proportion of a fund's investments allocated to specific industries or sectors.
Index replication: A fund strategy aiming to match the performance of a specific market index by holding similar securities.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
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Sara Appino has positions in Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends ASML, Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Tencent, and Vanguard Total International Stock ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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