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<h2>Key Points</h2><ul><li>The Vanguard Total International Stock ETF's purpose is to provide exposure to all international markets.</li><li>Having up to 10% of your portfolio in international stocks can help hedge against U.S. down periods.</li><li>This fund also routinely has a dividend yield higher than some popular dividend ETFs.</li><li>10 stocks we like better than Vanguard Total International Stock ETF ›</li></ul>The S&amp;P 500 is the stock market's most popular index, and it's the primary benchmark that investors typically use to assess whether an investment has been &#34;good.&#34;That's why, when looking at the Vanguard Total International Stock ETF's (NASDAQ: VXUS) performance over the past decade, many people would say VXUS has been a bad investment. It's up around 77% in that time, compared to the S&amp;P 500's 238% gain (as of April 20).Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »Of course, outperforming the S&amp;P 500 would be ideal, but VXUS is doing what it's intended to do well: providing broad exposure to companies outside the U.S. It's worth considering if you want your portfolio to be more well-rounded.<img alt="Someone looking at a board with ETF and icons on it." src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NTkxMC9wZXJzb24tYXQtYm9hcmQtdGhhdC1zYXlzLWV0Zi5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NTkxMC9wZXJzb24tYXQtYm9hcmQtdGhhdC1zYXlzLWV0Zi5qcGcmdz03MDA"/>
Image source: Getty Images.
<h2>You only need one ETF to cover a lot of international ground</h2>VXUS contains nearly 8,800 companies from around the world. Investing in international stocks can sometimes carry more geopolitical and currency risks than U.S. stocks, so being able to invest in thousands at once helps reduce some of those risks. Here is how the ETF is divided by regions and the most represented countries in those regions:<ul>
<li>Europe (37.5%): United Kingdom, France, Switzerland</li>
<li>Pacific (26.9%): Japan, Australia, South Korea</li>
<li>Emerging Markets (26.4%): China, Taiwan, India</li>
<li>North America (8.3%): Canada</li>
<li>Middle East (0.9%): Saudi Arabia, Israel, United Arab Emirates </li>
</ul>Each region, country, and market comes with its own pros and cons, but having both developed and emerging markets lets you take advantage of both relative stability and high-growth opportunities.<h2>Why not just go with the S&amp;P 500 instead?</h2>VXUS isn't meant to be an S&amp;P 500 replacement. Investing in international stocks should be a way to ensure your portfolio isn't overly reliant on the U.S. market. Most of your portfolio should be in American stocks. However, VXUS can be a safety net when the U.S. economy is down or U.S. stocks are in a rough patch.A good example is this year, when VXUS has outperformed the S&amp;P 500 by more than 5% through April 20. But to see why VXUS has underperformed the S&amp;P 500 so much over the past decade, you just need to see the difference in makeup between them.<section><table>
<tbody>
<tr>
<th>Sector</th>
<th>Percentage of VXUS</th>
<th>Percentage of S&amp;P 500</th>
</tr>
<tr>
<td>Financials</td>
<td>22.48%</td>
<td>12.6%</td>
</tr>
<tr>
<td>Industrials</td>
<td>15.9%</td>
<td>9.0%</td>
</tr>
<tr>
<td>Technology</td>
<td>15.8%</td>
<td>32.9%</td>
</tr>
<tr>
<td>Consumer discretionary</td>
<td>8.8%</td>
<td>9.9%</td>
</tr>
<tr>
<td>Basic materials</td>
<td>7.9%</td>
<td>2.1%</td>
</tr>
<tr>
<td>Healthcare</td>
<td>7.7%</td>
<td>9.5%</td>
</tr>
<tr>
<td>Energy</td>
<td>5.4%</td>
<td>4.0%</td>
</tr>
<tr>
<td>Consumer staples</td>
<td>5.3%</td>
<td>5.3%</td>
</tr>
<tr>
<td>Communication services</td>
<td>4.7%</td>
<td>10.3%</td>
</tr>
<tr>
<td>Utilities</td>
<td>3.3%</td>
<td>2.5%</td>
</tr>
<tr>
<td>Real estate</td>
<td>2.6%</td>
<td>1.9%</td>
</tr>
</tbody>
</table></section>Data source: Vanguard and Yahoo! Finance.Tech has driven much of the S&amp;P 500's gains over the past decade. Eight of the world's most valuable public companies are now American tech companies. That's a level of growth that the international market couldn't have reasonably kept up with over that time.I would definitely keep the bulk of my portfolio in the S&amp;P 500 to take advantage of the long-term reliability and growth of the U.S. economy, but allocating up to 10% to international stocks is a good complement to that core holding.<h2>An underrated income source</h2>Along with being cheap (its 0.05% expense ratio is one of the lowest you'll find), VXUS has an attractive dividend that makes it worthwhile. Its current dividend yield is around 2.8%, only slightly below its 2.9% average for the past decade.At 2.8%, VXUS's dividend yield is higher than popular dividend ETFs like the Vanguard High Dividend Yield ETF and Vanguard Dividend Appreciation ETF. It's also well over double what you'd get from an S&amp;P 500 ETF.VXUS Dividend Yield data by YChartsWe can't predict how the U.S. or international markets will perform going forward, but in either case, having a diversified portfolio that includes companies from around the world is a good idea. Their influence on your portfolio won't (and shouldn't) be the same, but having some skin in the game is worthwhile.VXUS may not be a routine market-beater, but it does its job well.<h2>Should you buy stock in Vanguard Total International Stock ETF right now?</h2>
Before you buy stock in Vanguard Total International Stock ETF, consider this:
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*Stock Advisor returns as of April 23, 2026. Stefon Walters has positions in Vanguard Total International Stock ETF. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF and Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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VXUS

The Vanguard Total International Stock ETF (VXUS) offers exposure to international markets, making it a potential hedge against U.S. downturns. Despite underperforming the S&P 500 over the past decade, VXUS provides broad diversification with nearly 8,800 companies globally and a competitive dividend yield of around 2.8%. While it shouldn't replace U.S. stocks, allocating up to 10% of a portfolio to VXUS can enhance stability. Investors should weigh VXUS against other opportunities, as it may not be a top pick currently, but it fulfills its intended role effectively.

The Most Misunderstood Vanguard ETF That Smart Investors Should Consider