ETF Talk: VXUS — Variety is the Spice of Life

“Diversification is protection against ignorance.”

— Warren Buffet

If you have ever considered dipping your toes into international waters and reaping the rewards of the international stock market, consider a cheap, broad international fund to diversify your portfolio.

Although U.S. stocks are more familiar to the American investor, international stocks can offer higher dividends, broadened opportunities and access to growth and valuation.

The Vanguard Total International Stock Index Fund ETF (VXUS) is a cost-effective, diversified fund that offers a broad range of exposure to international stocks and equity. VXUS is designed to spread investments across a variety of currencies, markets and sectors.

The top 10 holdings make up just under 11% of the portfolio’s total assets. That means that every holding is only a small portion of the portfolio. This is good news for those seeking diverse access to international stocks: you can truly dip your toe into this market without putting all your eggs, or both feet, in one basket, so to speak.

The fund has net assets of $606.21 billion and a yield of 3.01%. It has an expense ratio of just 0.05%. VXUS saw some excellent returns this year, up 5.74% over the last month, 8.86% over the past three months and 5.74% year to date.

The top 10 holdings account for 10.50% of the portfolio’s total assets and consist of Taiwan Semiconductor Manufacturing Company (2330.TW), 3%; Tencent Holdings Limited (0700.HK), 1.20%; ASML Holding NV (ASML.AS ), 1.07%; Samsung Electronics Co. LTD (005930.KS), 0.99%; Alibaba Group Holding Limited (9988.HK), 0.83%; Roche Holdings LLC (ROG.SW), 0.73%; AstraZeneca (AZN.L), 0.70%; HSBC Holdings plc (HSBA.L), 0.68%; Novartis AG (NOVN.SW), 0.66% and Nestle S.A. (NESN.SW), 0.63%.

Exclusive ETF Talk: Finding Value in Your Brokerage

Chart courtesy of StockCharts.com.

For those who are concerned about the impact of geopolitical events on investing, VXUS is an ideal ETF because it offers exposure to a wide range of international sectors and assets. It is an important addition to any portfolio because its diverse range of holdings can protect investors from localized economic downturns.

However, don’t just take my word for it. Investors should always do their due diligence before adding any stock, fund or ETF to their respective portfolios.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.