The Most Misunderstood Vanguard ETF

International stocks have steadily lagged the S 500 for the last 15 years. That kind of chronic underperformance doesn't build a good reputation and it certainly doesn't inspire investors to throw their money at it.

Many people will label the Vanguard Total International Stock ETF (NASDAQ: VXUS) (or any international fund for that matter) a "bad" fund. But you can't call a fund bad if you only look at it through the lens of performance. It ignores how the portfolio is structured, what its core strategy is, and what it means to provide for investors.

For example, the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) just underperformed the market badly from 2023 to 2025. But its core strategy is to target companies with healthy balance sheets, long histories of dividend payments, and above-average yields. That sounds like a pretty good strategy to me. In its case, it's a good fund whose strategy was simply out of favor, something that happens with all strategies from time to time.

Continue reading

Source Fool.com