LemonTrades
TL;DR
- VXUS owns thousands of stocks in developed and emerging markets outside the US, for a yearly fee of just 0.05%.
- It yields about 2.5%, paid quarterly, more than US index funds, because foreign companies pay out more of their profits.
- Its biggest holdings are TSMC, Samsung, SK hynix and ASML. It pairs with VTI to own nearly the whole world’s stock market.
- LemonTrades tells you what moved global markets and your funds, and why, as it happens.
Most US investors own mostly US stocks. VXUS is the simplest way to add the rest of the world.
What’s inside
| Company | Country | Share of VXUS |
|---|---|---|
| Taiwan Semiconductor | Taiwan | 4.3% |
| Samsung Electronics | South Korea | 2.0% |
| SK hynix | South Korea | 1.7% |
| ASML | Netherlands | 1.6% |
| Tencent | China | 0.8% |
| HSBC | UK | 0.8% |
The top 10 holdings are only about 15% of the fund, so it’s far more spread out than the S&P 500. Europe, Japan and emerging markets each make up a large slice.
Why own international stocks
- Spread your bets: the US has led for over a decade, but there have been long stretches, like 2000 to 2009, when international stocks did better.
- Cheaper valuations: foreign stocks trade on lower price-to-earnings ratios than US stocks.
- A weaker dollar helps: when the dollar falls, foreign stocks are worth more in dollars.
The risks
- Currency swings can cut returns.
- Slower growth in Europe and Japan.
- Political and market risk in emerging markets.
- Foreign tax on dividends, though you may claim a credit in a taxable account.
US side: does VTI pay dividends and is VOO a good investment. Building a mix: investment strategies.
Sources
Education, not financial advice. All investing involves risk, including the loss of your money. See our disclaimer.
