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Throughout 2025, the Vanguard S&P 500 ETF (NYSE: VOO) has performed well over the past 12 months at +29%, but Q1 2026 has been a struggle: at the time of this writing, it is -3.54%, year-to-date. By contrast, international stocks have done quite well, benefiting from a softer US dollar and a lower exposure to the volatile US tech sector. International ETFs may be a consideration for some investors to gain some exposure for the sake of market diversification. With that in mind, three to consider are:
- Vanguard Total International Stock Index Fund ETF Shares (NASDAQ: VXUS)
Vanguard FTSE Europe ETF
VGK covers the stocks of the developed nations in Europe and Scandinavia.
Issued by Vanguard, the second largest asset manager in the world after BlackRock, the Vanguard FTSE Europe ETF tracks the FTSE Developed Europe All Cap Index, which covers stocks from the Eurozone and Scandinavia. VGK is passively managed with an inception date of 3-4-2005. March has been a tough month for VGK. After climbing nearly 10% since the start of 2026, and seeing several billion more in inflows, March has erased nearly all of those gains. VGK has a Morningstar gold medalist rating.
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Net Assets
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$40.99 billion
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Avg. Daily Volume
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4.2million shares
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Yield
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2.64%
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YTD Return
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0.01%
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52 Wk. Range
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$62.02-$90.75
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1-Year return
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32.49%
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Beta
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1.08
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3-Year return
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18.66%
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Expense Ratio
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0.06%
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5-Year Return
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11.66%
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P/E Ratio
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17.54
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10-Year Return
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10.56%
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The top 10 holdings of VGK are:
- ASML Holding – 3.54%
- Roche Holding AG – 2.07%
- Novartis AG – 2.00%
- HSBC Holdings – 1.99%
- AstraZeneca PLC – 1.95%
- Nestle SA – 1.71%
- Shell PLC – 1.31%
- Siemens – 1.46%
- SAP SE – 1.28%
- Banco Santander SA – 1.16%
Vanguard Total International Stock Index Fund ETF Shares
VXUS covers global stock markets, excluding the US, within its 8500-odd stock portfolio.
Using the FTSE Global All Cap ex-USA Index as its benchmark, VXUS is an international equities ETF that boasts an 8,560 stock name portfolio. Drawing from Europe, PacRIm and Emerging Markets from around the globe, VXUS returned approximately 39% in 2025, although it too has retraced somewhat in March. It is one of the top retail investment choices for a broad international coverage ETF and has a Morningstar gold medalist rating.
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Net Assets
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$636.67 billion
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Avg. Daily Volume
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9.91 million shares
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Yield
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2.86%
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YTD Return
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2.81%
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52 Wk. Range
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$54.98-$84.28
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1-Year return
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39.91%
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Beta
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0.99
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3-Year return
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19.87%
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Expense Ratio
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0.05%
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5-Year Return
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9.85%
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P/E Ratio
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16.81
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10-Year Return
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10.61%
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Top 10 Largest Holdings:
- Taiwan Semiconductor – 3.43%
- Samsung Electronics – 1.59%
- ASML Holding NV – 1.29%
- TenCent Holdings – 0.92%
- SK hynix Inc – 0.91%
- Roche Holding AG – 0.76%
- AliBaba Group – 0.73%
- Novartis AG – 0.73%
- HSBC Holdings plc – 0.73%
- AstraZeneca plc – 0.71%
iShares MSCI Japan ETF
President Trump with the late Japanese PM Shinzo Abe, who was assassinated in 2022. His policy successor, Sanae Takaichi, is implementing a number of economic policy reforms to restore Japan’s finances.
Japan’s economy had been moribund for decades. Huge, non-performing loans to keiretsu continued to rollover due to political pressures, and innovation had slowed down to a crawl. The 2025 election of conservative Sanae Takaichi as Japan’s new Prime Minister has already implemented positive economic reforms. She is even more hardline than her assassinated LDP predecessor, Shinzo Abe, and close ally President Trump calls her a “winner”. Among her reforms include:
- “Sanaenomics,” a “three-arrow” approach focusing on expansive fiscal policy, strategic investments in technology/defense, and wage increases to combat inflation.
- Fiscal Stimulus of ¥13.9 trillion (roughly US$135 billion) for A.I., energy, and quantum technology.
- Wage increases and tax cuts for capital gains, as well as tax credits for families and additional household exemptions.
EWJ is an ETF created by BlackRock to track a customized index of Japanese equities. It contains 178 stocks and was launched March 12, 1996. It returned nearly 41% in the past year.
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Net Assets
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$20.31 billion
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Avg. Daily Volume
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10.7 million shares
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Yield
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3.95%
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YTD Return
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5.64%
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52 Wk. Range
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$59.84-$94.28
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1-Year return
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40.97%
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Beta
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0.84
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3-Year return
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21.84%
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Expense Ratio
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0.49%
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5-Year Return
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9.09%
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P/E Ratio
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17.91
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10-Year Return
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9.98%
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EWJ’s Top 10 holdings are:
- Mitsubishi UFJ Financial Group – 4.13%
- Toyota Motor Corp – 4.11%
- Hitachi Ltd. – 2.84%
- Sony Group Corp. – 2.42%
- Sumitomo Mitsui Financial Group – 2.62%
- Mitsubishi Corp. – 2.31%
- Tokyo Electron Ltd. – 2.26%
- Advantest Corp. – 2.15%
- Mizuho Financial Group – 2.12%
- Mitsui Ltd. – 2.04%
Diversification Strategy, Not a Long Term Trend
Exposure to international ETFs is something that should be viewed as a diversification strategy, rather than an overall portfolio rotation, since US market lag is likely to reverse in due course.
When one compares the extended 10-year picture, VOO clocked in with 3-Year trailing returns of 21.77%, 5-year returns of 14.15%, and 10-year 15.46%, pretty much on top across the board compared to international markets. Given how strong the current Trump administration’s pro-business policies are already stimulating employment (new job numbers off the charts) and over $18 trillion in fresh US investment, US equities will inevitably reverse their present doldrums. So international ETF exposure should be considered a diversification strategy, rather than a continued, ongoing trend.