VXUS vs VEA: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between VXUS and VEA

VXUS (Vanguard Total International Stock ETF) is a international equity fund managed by Vanguard. VXUS provides exposure to stocks from developed and emerging markets outside the United States, covering over 8,000 companies across Europe, Asia, and the rest of the world. It is the most popular way to add international diversification to a U.S.-focused portfolio. Beginners building a globally diversified portfolio often pair VXUS with VTI to own virtually every publicly traded stock in the world.

VEA (Vanguard FTSE Developed Markets ETF) is a international developed fund managed by Vanguard. VEA provides broad exposure to stocks in developed countries outside the United States, including companies in Europe, Japan, Australia, and Canada. With over 4,000 holdings, it is one of the most diversified international ETFs available. Beginners choose VEA to add international developed market exposure to their portfolios at an incredibly low cost of just 0.05%.

The most notable differences are in fees (0.07% vs 0.05%), number of holdings (8,537 vs 4,050), and 5-year returns (5.50% vs 6.50%).

Holdings Overlap Analysis

VXUS and VEA share 67% of their top holdings. There is moderate overlap, so owning both provides some additional diversification but with diminishing returns.

Cost Comparison Over Time

If you invest $10,000 and hold for 20 years (assuming 8% annual returns):

Over 20 years, the fee difference amounts to $170 on a $10,000 investment. VEA saves you more in fees over time.

Which One Should a Beginner Choose?

Choose VXUS if: You want investors seeking global diversification beyond the u.s. market, those building a complete world stock portfolio when paired with vti, investors who believe international stocks are undervalued relative to u.s. equities. It's managed by Vanguard with an expense ratio of 0.07%.

Choose VEA if: You want investors who want developed market international exposure without emerging markets, cost-conscious investors seeking the cheapest way to diversify outside the u.s., portfolio builders who want to pair vea with a separate emerging markets fund like vwo. It's managed by Vanguard with an expense ratio of 0.05%.

Can You Own Both VXUS and VEA?

With 67% holdings overlap, owning both means you're essentially doubling down on the same stocks. For beginners, we recommend picking one to keep things simple. If you want more diversification, consider pairing your choice with an international ETF like VXUS or a bond ETF like BND instead.

Frequently Asked Questions