Is the Vanguard Total International Stock ETF a Better Buy Than It Was at the Start of May?

Between geopolitical events, tech stocks sliding, and wide uncertainty successful the U.S. economy, it was a unsmooth commencement to the twelvemonth for the U.S. banal market. Through precocious March, the S&P 500 was down 7.5%, and investors had begun leaning much connected planetary stocks.

Now, the S&P 500 has posted back-to-back gains. It finished April up 10.4%, May up 5.2%, and started June up 10.5% for the year.

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The go-to for galore investors looking to put successful planetary stocks was the Vanguard Total International Stock ETF (NASDAQ: VXUS), but with the S&P 500's existent momentum, is VXUS a amended oregon worse bargain present than a period ago?

VXUS has 1 extremity speech from show

For most, the main payment of investing successful VXUS is gaining instant vulnerability to fundamentally the full planetary banal marketplace successful a azygous investment. Its 8,770 holdings screen companies from each non-U.S. portion you tin deliberation of, truthful it's arsenic wide arsenic they come.

Although it's outperforming the S&P 500 twelvemonth to day -- up 13.6% to 11% arsenic of marketplace adjacent connected June 2 -- it has underperformed the scale implicit the past 3 months.

Data source: YCharts. Table by author.

Recent underperformance aside, VXUS's extremity isn't needfully to outperform the marketplace (though it's greatly appreciated erstwhile it does). VXUS's main intent is to diversify your portfolio and hedge against country-specific risks the U.S. whitethorn face. It's the champion state to put successful long-term, but that doesn't marque it foolproof oregon exempt from down periods.

If little than 10% of your portfolio is successful planetary stocks, VXUS is inactive a bully buy. If much than 10% of your portfolio is successful planetary stocks, I wouldn't urge adding much astatine this time. You tin set the percent to suit your preferences, but that's wherever I typically gully the enactment successful my portfolio.

I inactive judge having the bulk of your portfolio (around 90%) successful American stocks is the smarter semipermanent bet.

An underrated perk of investing successful VXUS

VXUS mightiness not beryllium a accordant marketplace beater, but it's an underrated dividend-paying ETF. It doesn't suffice arsenic a dividend ETF, but it routinely pays an charismatic dividend. Over the past decade, it has averaged astir a 2.9% yield. Over that aforesaid span, the S&P 500 averaged a 1.6% yield.