Vanguard’s Other Index ETF Has Absolutely Destroyed SPY and VOO This Year | VXUS

2 hours ago 5

Austin Smith

Thu, December 18, 2025 astatine 11:48 AM CST 3 min read

A greenish upward arrow adjacent to the ticker 'VXUS' showing a '+21%' gain. Below it, successful smaller text, reads 'vs SPY/VOO +17.7%'. A tiny greenish enactment illustration trends upwards to the right. The inheritance features a faded, dotted satellite map, and the '24/7 WALL ST' logo is successful the bottommost close corner.

24/7 Wall St.

VXUS returned 21% done mid-December 2025 versus 17.7% for the S&P 500.
Royal Bank of Canada (the fund’s largest holding astatine 0.54%) posted 29% year-over-year net growth.
Forward P/E ratios for MSCI EAFE markets expanded from astir 12x to 14x during 2025.
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While astir investors obsess implicit SPY and VOO, Vanguard Total International Stock Index Fund ETF Shares (NYSEARCA:VXUS) has softly delivered 29% returns done mid-December 2025, crushing the S&P 500's 15% gain. For a $558 cardinal money charging conscionable 0.05% annually, that outperformance represents billions successful further wealthiness for investors who looked beyond U.S. borders. The existent story: planetary stocks achieved this contempt mixed currency headwinds, suggesting section equity gains approached 25-30% successful galore markets.

The macro situation shifted decisively successful favour of planetary equities. Earnings maturation extracurricular the U.S. accelerated passim 2025, with companies similar Royal Bank of Canada (VXUS's largest holding astatine 0.54%) posting 29% year-over-year net growth. This wasn't isolated. Canadian financials, European industrials, and Asian exertion firms benefited from synchronized planetary maturation and easing monetary argumentation extracurricular the United States.

Currency effects told a nuanced story. The Japanese yen weakened 3.3% against the dollar, amplifying returns from Japan's 15-20% portfolio weight. But the British lb strengthened 1.3%, creating a humble headwind for the 30-35% European allocation. That VXUS inactive outperformed by 3.3 percent points proves the show came from genuine concern fundamentals, not conscionable favorable speech rates.

Valuation compression besides mattered. International stocks entered 2025 trading astatine important discounts to U.S. equities. As that spread narrowed passim the year, aggregate enlargement added respective percent points to returns. The guardant price-to-earnings ratio for MSCI EAFE markets moved from astir 12x to 14x, portion the S&P 500's premium valuation near little country for aggregate expansion.

An infographic titled 'Vanguard Total International Stock Index Fund ETF Shares (VXUS)' dated December 18, 2025. The apical conception features a stylized globe with arrows indicating diversification and a magnifying glass, against a grid. Below, a conception titled 'HOW THE ETF WORKS (GLOBAL EX-U.S. DIVERSIFICATION)' describes Broad Exposure with a coin icon and Passive Management with a equilibrium scales icon. The 'SUITABLE USE CASE (CORE PORTFOLIO BUILDER)' section, represented by puzzle pieces, explains its purpose. The 'PROS & CONS (BALANCED VIEW)' conception lists 3 Pros with a greenish up arrow (Broad Diversification, Low Expense Ratio, Potential for Valuation Catch-up) and 3 Cons with a reddish down arrow (Currency Risk, Geopolitical & Regulatory Risks, Potential for Higher Volatility).

This infographic details the Vanguard Total International Stock Index Fund ETF (VXUS), outlining its mechanics, suitable usage cases, and a balanced presumption of its pros and cons for investors.

Interest complaint argumentation divergence volition dominate. If the Federal Reserve maintains higher rates portion the European Central Bank and Bank of Japan proceed easing, that could weaken the dollar and supply different tailwind for planetary returns. Monitor monthly cardinal slope statements and the quarterly World Economic Outlook from the IMF for argumentation trajectory signals.