VEA vs. IXUS: International Stocks Had a Breakout Year. These 2 ETFs Captured It Differently.
Key Points
The Vanguard FTSE Developed Markets ETF offers a lower expense ratio than the iShares Core MSCI Total International Stock ETF.
The iShares Core MSCI Total International Stock ETF provides exposure to emerging markets which are excluded from the Vanguard FTSE Developed Markets ETF portfolio.
The Vanguard FTSE Developed Markets ETF has delivered higher total returns over the last five years despite having a lower trailing dividend yield.
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The Vanguard FTSE Developed Markets ETF (NYSEMKT:VEA) offers a lower-cost path to developed economies, while the iShares Core MSCI Total International Stock ETF (NASDAQ:IXUS) provides broader global diversification including emerging markets.
Both funds serve as core international holdings for U.S.-based investors looking to diversify beyond domestic stocks. By capturing thousands of companies outside the U.S., these ETFs help mitigate the risks associated with a single-country portfolio while offering exposure to different currency movements and economic cycles. While they share overlapping positions in global giants, their geographic scopes differ significantly, impacting their risk profiles and long-term growth potential.
Snapshot (cost & size)
| Metric | IXUS | VEA |
|---|---|---|
| Issuer | iShares | Vanguard |
| Expense ratio | 0.07% | 0.03% |
| 1-yr return (as of June 1, 2026) | 33.20% | 33.40% |
| Dividend yield | 2.80% | 2.60% |
| Beta | 0.77 | 0.83 |
| AUM | $58.7 billion | $304.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard FTSE Developed Markets ETF is the more affordable option, charging less than half the fee of the iShares fund. However, the iShares Core MSCI Total International Stock ETF currently provides a higher payout for income-focused investors, with a yield gap of 0.20 percentage points.
Performance & risk comparison
| Metric | IXUS | VEA |
|---|---|---|
| Max drawdown (5 yr) | (30.10%) | (29.70%) |
| Growth of $1,000 over 5 years (total return) | $1,502 | $1,593 |
What's inside
The Vanguard FTSE Developed Markets ETF (VEA) targets 3,873 stocks across developed economies in Canada, Europe, and the Pacific region. Sector exposure includes financial services at 23%, industrials at 19%, and technology at 14%. Its largest positions include Samsung Electronics (KS:005930) at 2.26%, ASML (AMS:ASML.AS) at 1.78%, and SK Hynix (KS:000660) at 1.54%. Launched in 2007, the Vanguard fund has a trailing-12-month dividend of $1.88 per share.
The iShares Core MSCI Total International Stock ETF (IXUS) tracks a broader index of 4,160 stocks that includes emerging markets alongside developed ones. Key sectors include financial services at 22%, technology at 18%, and industrials at 16%. Top holdings include Taiwan Semiconductor Manufacturing (TW:2330) at 4.24%, Samsung Electronics (KS:005930) at 2.25%, and SK Hynix (KS:000660) at 1.96%. Launched in 2012, IXUS paid $2.74 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
After more than a decade of lagging behind U.S. markets, international stocks staged a remarkable comeback in 2025. Both VEA and IXUS returned more than 30% in the last year, driven by a weakening U.S. dollar, European fiscal stimulus, AI-related growth across Asian markets, and a broad rotation away from historically expensive U.S. valuations. For long-term investors who had neglected international exposure, 2025 was a reminder of why diversification matters.
The question now is whether that momentum continues and how to position for it. VEA focuses exclusively on developed markets including Europe, Japan, and Australia, at one of the lowest fees available for international exposure. IXUS holds even more companies, including markets like India, China, and Brazil alongside the same developed market core, at a modestly higher cost.
Both funds remain attractively valued compared to U.S. equities even after their strong run. VEA is the lower-cost, lower-volatility choice for investors who want developed market exposure without the added complexity of emerging economies. But if you want the broadest possible international diversification in a single fund, choose IXUS.
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Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard FTSE Developed Markets ETF. The Motley Fool has a disclosure policy.
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