Vanguard funds compete fiercely among themselves. This is mainly due to investor loyalty and a highly successful system. When all these variables come together, Vanguard’s funds continue to be analyzed in great detail. For example, the VXUS vs VOO comparison, which has been frequently asked recently, is an important point among them.
Information About VXUS vs VOO
In the world of index investing, the Vanguard Total International Stock Index Fund ETF (VXUS) and the Vanguard S&P 500 ETF (VOO) are two popular funds that are frequently evaluated by investors looking to build diversified portfolios. In this content, we will discuss which fund will be more successful in 2023. It is also possible to chart the right path and compare performance, assets, management, fees and the global economic environment.
Why Is The VXUS vs VOO Comparison So Often Made?
VXUS vs VOO are index funds that allow investors to invest in international and US equities respectively. It is extremely important that these differences are accurately reflected and that the comparison stands out. Investors generally prefer to make such a comparison when narrowing their choices down to two. This comparison is often made very often, mostly due to its structure.
VXUS is an exchange-traded fund (ETF) designed to track the performance of the FTSE Global All Cap ex U.S. Index. According to our information, VXUS has $38.8 billion in assets under management and an expense ratio of 0.08% as of September 2021.
VOO is an ETF designed to track the performance of the S&P 500 Index. As of September 2021, VOO had $212.9 billion in assets under management and an expense ratio of 0.03%.
Benchmarking Funds for Performance
In order to determine which of the VOO and VXUS funds may perform better this year, it is necessary to analyze the historical performance of VXUS and VOO, taking into account their return, risk and volatility.
It would be a better option to examine its history first. Let’s start by noting that VOO provides higher returns compared to VXUS, primarily due to the strong performance of US equities. However, VXUS also stands out for its options to invest in international stocks, which can provide diversification benefits and help reduce risk.
The performance of both funds is influenced by a variety of factors, including global economic conditions, interest rates and corporate earnings growth.
Analyzing The Funds
VXUS and VOO have different investment portfolios due to their different investment objectives. VXUS invests in equities in international markets, while VOO focuses on large-capitalization US equities.
The two funds’ largest holdings reflect their respective indices; VOO’s largest holdings include leading US companies such as Apple, Microsoft and Amazon. In contrast, VXUS holds leading international stocks such as Alibaba, Tencent and Nestlé.
The sector and geographic allocations of the two funds also differ significantly. VOO invests primarily in US equities, while VXUS offers exposure to European, Asian and emerging market equities.
Comparison of Costs
Both VXUS and VOO are managed by Vanguard, a reputable investment company known for its low-cost index funds. However, VOO has a slightly lower expense ratio of 0.03% compared to 0.08% for VXUS. This difference in fees may have a small impact on the funds’ long-term performance.
The current global economic environment will play a critical role in determining the future performance of VXUS and VOO. Factors such as trade tensions, geopolitical developments and differences in economic growth between developed and emerging markets could affect the returns of both funds.
Investors should be aware of the potential risks and opportunities associated with global economic conditions and how these factors may affect the performance of international and US equities.
Which One Looks More Advantageous?
While it is difficult to predict which fund will outperform in 2023, VOO has historically delivered superior returns based on the strong performance of US equities. To be honest, it is not possible to predict which fund will be more successful.
Nevertheless, it would not be wrong to predict that these funds will stand out as a very different and high quality option in 2023. We recommend that you seek the support of an expert to get more detailed information on this subject. It should not be forgotten that the characteristics of the funds will also change over the years.
