VXUS: A Perfectly Good Fund, So It Goes

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For fifteen years now, stocks outside of America have been…underperforming. It’s a fact. Like rain. People notice. They get discouraged. And discouraged people don’t throw money at things. It’s simple, really.

Lots of folks label the Vanguard Total International Stock ETF (VXUS +0.54%) a “bad” fund. Which is…optimistic, let’s say. You can’t really judge a fund just by looking at a number going up or down. It’s like judging a person by their hat. Ignores the whole messy business of what the fund is, what it’s trying to do. It’s a little dehumanizing, don’t you think?

Take the Schwab U.S. Dividend Equity ETF (SCHD 0.89%). It had a rough patch, 2023 to 2025. Underperformed. But it’s built on solid companies. Companies that don’t just promise the moon, but actually pay dividends. Healthy balance sheets. Sounds reasonable, doesn’t it? Sometimes, good strategies just fall out of favor. Happens to all of us. So it goes.

The Vanguard fund is the same. It tracks the FTSE Global All Cap ex-US Index. A mouthful, I know. But it just means it’s trying to give you a slice of the entire foreign stock market. Not to beat the S&P 500. Just…access. Cheap, easy access. A perfectly good thing, really.

The U.S. and International Markets: Different Animals

The S&P 500 is, unsurprisingly, heavily weighted toward technology. About 33%, last I checked. Then financials, consumer stuff, communications. Predictable. Like a sunrise.

The international ETF? Different. Financials are biggest (23%), then industrials, tech, consumer discretionary. It’s not a mystery. International markets are more tied to the real world. To things that break and need fixing. Less reliant on algorithms and dreams of flying cars.

We talk a lot about diversification. About not putting all your eggs in one basket. It’s common sense. Because these markets are different. And different things perform differently. The last decade has been about tech. AI. So, naturally, the market dependent on tech did well. It’s not rocket science. So it goes.

But things change. Markets shift. And when they do, when the world decides it needs more factories and fewer social media platforms, international stocks might just outperform. A thought. Just a thought.

A Good Fund, Despite Everything

If you stop worrying about beating some arbitrary benchmark and actually consider what this ETF offers, you might be pleasantly surprised. Or not. The universe is indifferent, after all.

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It gives you access to over 8,500 stocks. 8,500! That’s a lot of companies. It has $133 billion in assets. Which means it’s liquid. You can buy and sell without moving the market. And the expense ratio is 0.05%. Next to nothing. It’s efficient. A machine working as it should.

That’s the definition of a strong fund. And why it’s so often misunderstood. People want miracles. They want to get rich quick. This fund offers something simpler: access, diversification, and a reasonable cost. It’s not glamorous. But it’s solid. And sometimes, solid is enough. So it goes.

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2026-02-25 18:32