Vanguard Total International Stock ETF

VXUS

Market cap $151B

by Victor Haghani, James White, 5/22/26 Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

The S&P 500 and Russell 2000 are the primary indexes for large-cap and small-cap stocks, respectively. Mid-cap stocks are seen as the sweet spot between stability and growth opportunities.

While American investors have spent the last decade celebrating the Magnificent Seven and paying premium multiples for U.S.

For five years, the case for international diversification has felt theoretical. Vanguard Total International Stock Index Fund ETF Shares (NASDAQ:VXUS | VXUS Price Prediction) is the cleanest way to own roughly half of global market capitalization, yet U.S.

Easing geopolitical tensions, a softer dollar and improving risk appetite are reviving interest in global equity ETFs.

Investing in the S&P 500 is one of the easiest ways to grow your money alongside the U.S. economy. The Vanguard Dividend Appreciation ETF owns stocks with at least 10 straight years of dividend increases.

If you opened your brokerage statement this year and noticed your portfolio looked suspiciously like the S&P 500 with a few extra tech names sprinkled in, you are not alone.

Given the American economy's dominance, it's hard to make a case for betting against the U.S. The S&P 500 index's monster rise in the past decade has driven investor fears about the market's current valuation. It makes sense to allocate 5% of a portfolio to the Vanguard Total International Stock ETF.

Vanguard Total International Stock Index Fund ETF has attractive valuations, a 2.77% TTM dividend yield, and broad diversification across developed and emerging markets. VXUS [IMO] trades at a 35% forward discount to the S&P 500, with a P/E of 16.9x and EPS growth of 14.3%, supporting a bullish medium-term outlook. Key catalysts include fiscal expansion in Europe and Japan, as well as potential FX tailwinds from a weaker dollar, enhancing VXUS's return potential.

Even modest monthly investments made consistently over time can eventually turn into $1 million or more. A retirement portfolio should be built around ultra-low-cost, broadly diversified index funds.