Why Smart Investors Choose (VXUS)?

International stocks offer amazing chances for smart investors. Moreover, they help spread risk across many countries. Furthermore, the global market underwent significant changes in 2025. Let me tell you about one fund (VXUS) that gives you access to the whole world.

What Makes VXUS Special

The fund I’m talking about tracks stocks from around the world. However, it skips U.S. companies completely. Instead, it focuses on both rich and growing countries. Also, it holds over 8,500 different stocks. This gives you huge variety in one simple purchase.

VXUS price performance chart showing the ETF's price movements from June to August 2025 — VXUS price performance chart showing the ETF’s price movements from June to August 2025

The fund started in 2011. Since then, it has grown to over $100 billion in size. Additionally, millions of people trust it with their money. The low cost of just 0.05% per year makes it very cheap to own.

How VXUS Has Performed Recently

Let me show you what happened to the stock price recently:

The chart shows some ups and downs. However, this is normal for international stocks. Furthermore, the fund bounced back well after the April market crash. Also, it has gained about 18% so far in 2025.

Here’s what the numbers tell us:

Current price: Around $68
Year-to-date return: +18.3%
Dividend yield: 2.86%
Trading volume: Very high liquidity

Where Your Money Goes Around the World

When you buy this fund, your money spreads across many countries. Let me show you exactly where:

Pie chart showing the geographic distribution of the international fund across different countries and regions

Japan takes the biggest slice at 14.7%. Next comes the United Kingdom at 8.5%. Then China follows with 7.6%. Canada, Germany, and Switzerland also get big portions.

This spread helps protect your money. If one country struggles, others might do well. Therefore, you don’t put all your eggs in one basket.

Top Companies You’ll Own

The fund holds thousands of companies. However, some are bigger than others. Let me show you the top ones:

Bar chart showing the top 10 stock holdings in the international fund with their respective weight percentages

Taiwan Semiconductor leads the pack. This chip maker is huge in the tech world. Next comes Tencent from China. This company runs popular apps and games. ASML from the Netherlands makes important chip equipment.

These companies represent different industries:

Technology (chips, software)
Healthcare (medicines)
Finance (banks)
Consumer goods (food, drinks)

Why VXUS Beat U.S. Stocks in 2025

This year brought big surprises. International stocks did better than U.S. ones. Here’s why:

Trade War Effects: Trump’s tariff threats hurt U.S. companies more. Meanwhile, other countries found new trading partners. Therefore, international stocks held up better.

Currency Changes: The dollar got weaker against other money. This helped international stocks when converted back to dollars. Also, it made foreign goods cheaper for Americans.

Better Value: International stocks cost less compared to their earnings. U.S. stocks became too expensive for many investors. So smart money moved overseas.

New Growth Stories: Europe started spending big on defense and roads. Germany alone plans to spend 1 trillion euros over 10 years. This creates jobs and grows the economy.

Simple Math Behind the Returns

Let me break down the money side:

Dividend Income: The fund pays about 2.86% per year in dividends. This comes four times yearly. Most payments happen in March, June, September, and December.

Price Growth: Stock prices also go up over time. This adds to your total return. Together with dividends, you get compound growth.

Low Costs: The fund charges only 0.05% per year. This means for every $1,000 invested, you pay just 50 cents. Low costs help your money grow faster.

Comparing to Other Options

You have several choices for international investing. Let me compare them:

VXUS vs. Mutual Fund Version: The mutual fund version costs 0.11% per year. That’s more than double. Also, you can trade the ETF anytime during market hours.

VXUS vs. Developed Markets Only: Some funds skip emerging markets. However, this fund includes both. This gives you more growth potential from faster-growing countries.

VXUS vs. Individual Countries: You could buy funds for just Japan or Europe. But this fund does the hard work for you. It spreads your money across all countries automatically.

How to Use This Fund in Your Portfolio

Here are simple ways to add international stocks:

The Balanced Approach: Put 20-30% of your stock money in international funds. Keep the rest in U.S. stocks. This gives you balance without going overboard.

The Dollar-Cost Averaging Way: Buy the same dollar amount each month. This smooths out price swings over time. Also, it removes emotion from investing.

The Rebalancing Method: Check your portfolio every few months. If international stocks grow too much, sell some. If they fall too much, buy more. This keeps your target percentages.

Current Market Conditions and Opportunities

Right now presents good timing for international stocks:

Tariff Uncertainty: While trade wars create short-term worry, they often lead to new opportunities. Countries adapt by finding new markets and partners.

Interest Rate Changes: Many countries are cutting interest rates. This helps their economies grow. Lower rates also make stocks more attractive than bonds.

Emerging Market Comeback: Countries like India and China show strong growth. Their young populations and growing middle classes create demand. This drives company profits higher.

Risks You Should Know About

Every investment has risks. Here are the main ones:

Currency Risk: When foreign money weakens against dollars, your returns suffer. However, this works both ways. Sometimes it helps your returns.

Political Risk: Elections and policy changes affect markets. Trade wars and conflicts create uncertainty. But diversification across many countries reduces this risk.

Economic Risk: Some countries grow slower than others. Recessions happen. Yet global diversification helps smooth these bumps.

Tax Considerations for Smart Investors

International funds create some tax complexity:

Foreign Tax Credits: The fund pays taxes to foreign governments. You can often claim credits for these on your U.S. tax return. This reduces double taxation.

Dividend Taxation: Most dividends qualify for lower tax rates. This helps your after-tax returns. Keep the fund in taxable accounts to get this benefit.

Wash Sale Rules: These apply to international funds too. Don’t sell at a loss and buy back within 30 days. This would prevent you from claiming the tax loss.

Technology and Innovation Abroad

International markets lead in many tech areas:

Chip Manufacturing: Taiwan and South Korea dominate chip making. These companies power our phones and computers. The fund gives you exposure to this critical industry.

Clean Energy: European countries lead in solar and wind power. China makes most solar panels. These trends will likely continue for years.

Financial Technology: Many countries adopt mobile payments faster than the U.S. Companies in Asia and Europe innovate in banking and payments.

Building Wealth Over Time

This fund works best as a long-term holding:

Time Horizon: Plan to hold for at least 5-10 years. Short-term ups and downs don’t matter much. Focus on the long-term growth story.

Regular Investing: Add money consistently over time. This approach has worked well historically. Market timing rarely works for regular investors.

Patience Pays: International stocks sometimes lag U.S. stocks for years. Then they catch up quickly. Patient investors get rewarded.

The Dividend Growth Story of VXUS

International companies often pay higher dividends:

Steady Payments: Many foreign companies have long histories of dividend payments. They value returning cash to shareholders. This provides steady income.

Growing Payments: The fund’s dividend has grown about 6.5% per year recently. This beats inflation and helps maintain purchasing power. Also, growing dividends often signal healthy companies.

Reinvestment Power: Automatically reinvesting dividends creates compound growth. Over many years, this significantly boosts total returns.

Final Thoughts: Is VXUS Right for You?

This international stock fund offers excellent global diversification. Furthermore, it costs very little to own. Additionally, it has performed well this year while U.S. stocks struggled.

However, every investor’s situation differs. Think about your goals and timeline. Also, consider how much international exposure you want. Finally, remember that past performance doesn’t guarantee future results.

The fund works well for most long-term investors. It’s simple, cheap, and effective. Moreover, it removes the guesswork from international investing. You get the whole world in one fund.

Whether you’re just starting or already investing, international stocks deserve a place in your portfolio. This fund makes it easy to get that exposure. Just remember to stay patient and keep investing regularly.

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Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. We do not encourage users to buy, sell, or hold any securities. Stock markets are subject to change and past performance does not guarantee future results. Always conduct your own due diligence and consult with qualified financial advisors before making investment decisions.

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