VSS: A Thousand Bucks & a Quiet Hope

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Last year, everyone was suddenly very interested in international stocks. It was like discovering a forgotten drawer filled with slightly-too-small sweaters – a pleasant surprise, mostly because we hadn’t expected anything at all. The MSCI ACWI ex USA IMI Index jumped a respectable 34.2%, and that, naturally, caused a flurry of activity around ETFs. I watched it all from my desk, mostly trying to remember if I’d watered the fern.

But it wasn’t the big boys getting all the attention, not really. It was the little guys. Specifically, the ex-U.S. small-cap stocks, conveniently packaged in funds like the Vanguard FTSE All-World ex-US Small-Cap ETF (VSS +0.08%). Last year, it returned nearly 30%. Thirty percent! Which, in my experience, is enough to make even a seasoned trader briefly consider a career change – maybe alpaca farming. It certainly outperformed the Russell 2000 and the S&P SmallCap 600, which is nice, I suppose. Though I’m not sure those indexes were actively rooting for VSS.

Now it’s 2026, and the question is, does this Vanguard ETF deserve a thousand dollars of your money? Can it repeat the performance? I’ve been staring at the charts, and honestly, I’m leaning towards yes. Not because I’m some kind of financial wizard, but because it feels… quiet. Like a well-behaved child at a chaotic birthday party.

A Mildly Anonymous Existence

It holds $9.6 billion in assets, which is a lot of money, I guess. But within the vast Vanguard empire, it’s…understated. It’s the beige cardigan of ETFs. And that’s appealing. Everyone’s chasing the shiny objects, the next meme stock, the thing that will make them instantly rich and allow them to finally afford that miniature schnauzer. Meanwhile, this ETF just sits there, steadily accumulating value. Some experts are suggesting this international rebound could last, and honestly, I’m tired of being surprised.

The biggest country weight is Japan, at 14.6%. And Japan, as it turns out, is having a moment. Apparently, a new Prime Minister, Sanae Takaichi, was elected, and she’s pro-market. They’re calling it “Sanaenomics” or the “Takaichi trade.” It sounds like a board game. Whatever it is, global investors seem encouraged. I’m not sure what that says about them, or about the general state of things, but I’m not qualified to judge. I just move the numbers around.

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And here’s the real kicker: diversification. My portfolio, like most, is embarrassingly heavy on domestic large caps. It’s like a diet consisting entirely of comfort food. This Vanguard ETF holds 4,827 stocks, none of which account for more than 0.27% of the portfolio. That’s… a lot of stocks. It’s like a meticulously curated museum of small companies. It’s a sensible thing, diversification, even if it doesn’t feel particularly glamorous.

All this comes with an annual fee of 0.08%, or $8 on a $10,000 investment. Which, frankly, is a steal. It’s less than I spend on artisanal coffee in a week. So, if you’re looking for a place to put a thousand dollars, and you’re not expecting overnight riches, this ETF might just be the quiet, unassuming friend your portfolio needs. It won’t throw a party, but it might just grow on you.

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2026-01-17 00:32