The Vanguard FTSE Emerging Markets ETF (VWO +0.71%) provides concentrated exposure to developing economies with a significant technology tilt, whereas Vanguard Total International Stock ETF (VXUS +0.83%) offers broad-market coverage including both developed and emerging nations.
Selecting between these two Vanguard heavyweights depends on whether an investor seeks specific exposure to high-growth developing markets or a broader, all-encompassing international strategy. While both funds provide diversification outside the United States, they vary significantly in their geographic focus, sector weights, and historical risk profiles. Let’s take a deeper dive.
Snapshot (cost & size)
| Metric | VXUS | VWO |
|---|---|---|
| Issuer | Vanguard | Vanguard |
| Share price | $84.48 (as of 2026-06-26) | $58.58 (as of 2026-06-26) |
| Expense ratio | 0.05% | 0.06% |
| 1-yr return (as of June 26, 2026) | 26.70% | 21.60% |
| Dividend yield | 2.60% | 2.40% |
| Beta | 0.76 | 0.59 |
| AUM | $652.3 billion | $162.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield based on the closing price of June 26.
Both funds are highly cost-efficient, though the Vanguard Total International Stock ETF carries a slightly lower expense ratio of 0.05% compared to 0.06% for its emerging markets counterpart. The broader fund also provides a marginally higher payout for income-seeking investors.
Performance & risk comparison
| Metric | VXUS | VWO |
|---|---|---|
| Max drawdown (5 yr) | (29.40%) | (32.60%) |
| Growth of $1,000 over 5 years (total return) | $1,488 | $1,255 |
What's inside
The Vanguard FTSE Emerging Markets ETF focuses on companies in developing economies like China, Brazil, and Taiwan. Its largest positions include Taiwan Semiconductor Manufacturing Co. Ltd. (TWSE:2330) at 14.69%, Tencent Holdings Ltd. (SEHK:700) at 2.75%, and Alibaba Group Holding Ltd. (SEHK:9988) at 2.26%. The fund holds 6,348 securities and leans heavily toward technology, which comprises 32.8% of the portfolio, followed by financial services at 19% and consumer cyclical at 9.9%. VWO was launched in 2005. The Vanguard FTSE Emerging Markets ETF has paid $1.38 per share over the trailing 12 months, which, on its recent ~$58.58 share price, works out to a 2.40% yield.
In contrast, the Vanguard Total International Stock ETF tracks a much broader index of 8,738 stocks across developed and emerging markets, excluding the U.S. Its top holdings include Taiwan Semiconductor at 3.89%, Samsung Electronics Co. Ltd. (KOSE:A005930) at 2.19%, and SK Hynix Inc. (KOSE:A000660) at 1.86%. This portfolio is more balanced across sectors, led by financial services at 21.7%, technology at 21.04%, and industrials at 15.6%. VXUS was launched in 2011. The Vanguard Total International Stock ETF has paid $2.19 per share over the trailing 12 months, which on its recent ~$84.48 share price works out to a 2.60% yield.
Which fund is the better buy?
Both of these Vanguard ETFs offer extensive exposure to equities outside the U.S., making them a good source of portfolio diversification for investors who are probably heavily invested in American stocks.
VWO and VXUS are similar in some ways: they hold about a quarter of their holdings in the large-cap value space, with another 57% in the large-cap blend and growth styles.
But in key ways, these finds are not the same. They have crucial differences that investors should note before investing.
The Vanguard FTSE Emerging Markets ETF — VWO — is about two-thirds invested in emerging markets, which are riskier but, theoretically, should provide superior long-term growth. Nearly one-third of its holdings are Taiwan-listed stocks, followed by China (26%) and India (16%), the next-largest markets.
The Vanguard Total International Stock ETF — VXUS — is 82% in developed-world stocks, with the balance primarily in emerging markets. Its top country-level holdings are Japan (15.2%), Taiwan (8.6%), and Canada (7.8%).
Expenses and dividend yield are close enough that they shouldn’t be a major factor in your investment decision. The biggest differentiator? Returns. Here, VXUS bests its Vanguard sibling over every time frame, including 3-year (20.5% return for VXUS compared to 18.8%), 5-year (8.8% to 5.4%), and 10-year (9.9% to 9%).
Based on performance, the Vanguard Total International Stock ETF is the better buy, although investors seeking to balance their portfolio between developed and emerging markets could consider VWO.
For more guidance on ETF investing, check out the full guide at this link.
