ETF Comparison

VTI vs VXUS

U.S. stocks vs international stocks. The two-fund portfolio that covers the entire world.

Updated for 2026. The case for both, and how to allocate.

3,600+

VTI: U.S. Stocks

8,000+

VXUS: Int'l Stocks

TL;DR

VTI + VXUS is one of the simplest and most respected portfolio structures in investing. VTI gives you the entire U.S. stock market. VXUS gives you the rest of the world. Together, two funds cover approximately 11,600 stocks across every investable country on Earth.

Common allocation: 60-80% VTI (U.S.) and 20-40% VXUS (international). Vanguard's own target-date funds use roughly 60/40. There is no perfect ratio — pick one you are comfortable with, automate it, and rebalance once a year.

Side-by-Side Comparison

Two funds that, together, cover the entire global stock market.

Feature	VTI (U.S.)	VXUS (International)
Index Tracked	CRSP US Total Market — ~3,600 U.S. stocks	FTSE Global All Cap ex US — ~8,000 international stocks
Expense Ratio	0.03%Edge	0.07%
Number of Holdings	~3,600 stocks (U.S. only)	~8,000 stocks (developed + emerging markets, ex-U.S.)Edge
Geographic Coverage	United States only — 100% domestic	~45% Europe, ~30% Asia-Pacific, ~25% emerging markets
Currency Exposure	100% U.S. dollar denominated	Exposed to EUR, GBP, JPY, and dozens of other currencies
Dividend Yield	~1.3%	~3.0% — international stocks tend to pay higher dividendsEdge
Tax Efficiency	Excellent — Vanguard ETF structureEdge	Good, but foreign dividend withholding taxes reduce net yield in taxable accounts
Foreign Tax Credit	Not applicable — all U.S. stocks	Eligible for Foreign Tax Credit in taxable accounts (partially offsets foreign withholding)Edge
Top Countries (ex-U.S.)	N/A	Japan, UK, China, Canada, France, Germany, Switzerland, Australia, India
Market Cap Coverage	Large, mid, small, and micro-cap U.S. stocks	Large, mid, small, and micro-cap international stocks

The Case for International Stocks

The U.S. represents roughly 60% of the global stock market by market capitalization. That means 40% of the world's investable equity is outside the U.S. Skipping international stocks entirely means ignoring companies like TSMC, Nestle, ASML, Samsung, Toyota, LVMH, and thousands of others.

U.S. stocks have outperformed international stocks for the past 15 years, which makes it tempting to go all-in on VTI. But from 2000 to 2009, the S&P 500 returned essentially 0% while international developed markets returned roughly 30% and emerging markets returned over 150%. Performance leadership rotates. The question is not “which will do better next?” — it is “can I predict which will do better next?” If the answer is no (and it is), you should own both.

Glen's Take

I lean toward heavier U.S. allocation (70-80% VTI, 20-30% VXUS), but I do hold international stocks. The U.S. has exceptional corporate governance, rule of law, and innovation ecosystems. But I am not arrogant enough to think the U.S. will outperform every other country forever. Owning VXUS is cheap insurance against being wrong.

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Popular Allocation Models

There is no single “right” answer. Here are the most common approaches.

100/0

100% VTI — U.S. Only

The simplest approach. You believe U.S. companies will continue to dominate global markets. Many successful investors (including Warren Buffett) have recommended this approach. Downside: you miss 40% of the global market and have zero geographic diversification.

80/20

80% VTI / 20% VXUS — Light International

A modest international allocation that provides some geographic diversification without significantly diluting U.S. exposure. This is a good starting point for investors who are skeptical of international stocks but want some hedge against U.S. underperformance.

60/40

60% VTI / 40% VXUS — Global Market Cap Weight

This approximately matches the actual global market capitalization split between U.S. and international stocks. Vanguard's target-date funds use a similar ratio. This is the most “neutral” allocation — you are not making a bet on any particular country outperforming.

Frequently Asked Questions

Do I need international stocks if I already own VTI?

It depends on who you ask. The case for international diversification is that U.S. stocks have outperformed international stocks for the past 15 years, but this has not always been the case — international stocks outperformed U.S. stocks from 2000 to 2009. Owning both VTI and VXUS means you are covered regardless of which region outperforms next. Many financial advisors recommend a 60/40 or 70/30 split between domestic and international. Vanguard's own target-date funds allocate roughly 40% to international stocks.

What is the right VTI to VXUS ratio?

There is no universally correct answer. Common allocations include: (1) 100% VTI / 0% VXUS — for those with strong U.S. conviction; (2) 80% VTI / 20% VXUS — a light international allocation; (3) 60% VTI / 40% VXUS — roughly matches global market-cap weights; (4) 70% VTI / 30% VXUS — a popular middle ground. Vanguard's target-date funds use approximately 60% domestic / 40% international for the equity portion. Pick a ratio you are comfortable with and stick with it.

Why has VTI outperformed VXUS recently?

U.S. stocks — particularly large-cap technology companies — have dominated global returns for the past 10-15 years. Companies like Apple, Microsoft, Nvidia, Amazon, and Alphabet are U.S.-listed and have experienced extraordinary growth. International markets lack comparable tech giants at the same scale. Additionally, the strong U.S. dollar has hurt international returns for U.S.-based investors. This U.S. outperformance has not always been the case and is not guaranteed to continue.

Is VXUS the same as investing in emerging markets?

No. VXUS includes both developed international markets (Japan, UK, Germany, France, Switzerland, Australia, Canada) and emerging markets (China, India, Brazil, Taiwan, South Korea). Roughly 75% of VXUS is in developed markets and 25% in emerging markets. If you want pure emerging market exposure, Vanguard offers VWO (Vanguard FTSE Emerging Markets ETF). VXUS is a comprehensive 'everything except the U.S.' fund.

Can I just use VT instead of VTI + VXUS?

Yes. VT (Vanguard Total World Stock ETF) combines U.S. and international stocks in a single fund, with the allocation determined by global market cap weights (roughly 60% U.S. / 40% international). It charges 0.07% and holds about 9,800 stocks from around the world. The advantage of VTI + VXUS is that you can customize your U.S./international ratio. The advantage of VT is maximum simplicity — one fund, one purchase, global diversification.

Should I hold VXUS in my taxable account or IRA?

There is a tax advantage to holding VXUS in a taxable brokerage account rather than an IRA. When foreign governments withhold taxes on dividends (typically 10-15%), you can claim a Foreign Tax Credit on your U.S. tax return to offset that withholding. This credit is only available in taxable accounts — inside an IRA, the foreign withholding tax is simply lost. However, this is a secondary optimization. Do not let it prevent you from investing in international stocks in whatever account you have available.

The Bottom Line

VTI + VXUS is one of the simplest, cheapest, and most diversified portfolio structures available to any investor. Two funds, ~11,600 stocks, every investable country on Earth, for a blended expense ratio under 0.05%.

Do not overthink the ratio. Whether you choose 80/20, 70/30, or 60/40, the most important thing is that you are investing consistently in low-cost, broadly diversified index funds. That decision alone puts you ahead of the vast majority of investors.

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