Wealthy PotVEU vs VXUS: The Difference Is Small Caps
VEU and VXUS are both Vanguard ETFs that own stocks outside the United States, in both developed and emerging markets. They look interchangeable, and for many portfolios they nearly are. The one real difference is size: VEU holds only large and mid-sized companies, while VXUS adds small companies too, which is why VXUS owns more than twice as many stocks. VEU charges 0.04%, VXUS 0.05%.
The Short Answer
- VEU tracks the FTSE All-World ex US Index: large and mid caps outside the U.S.
- VXUS tracks the FTSE Global All Cap ex US Index: the same large and mid caps, plus small caps.
- VEU's index sits inside VXUS's index. VXUS is the broader fund.
- The fee gap is one basis point (0.04% vs 0.05%), or $1 a year on $10,000.
VEU vs VXUS Side by Side
| Feature | VEU | VXUS |
|---|---|---|
| Full name | Vanguard FTSE All-World ex-US ETF | Vanguard Total International Stock ETF |
| Index | FTSE All-World ex US Index | FTSE Global All Cap ex US Index |
| Company sizes | Large and mid cap | Large, mid and small cap |
| Markets | Developed and emerging, ex U.S. | Developed and emerging, ex U.S. |
| Number of stocks | 3,856 | 8,790 |
| Expense ratio | 0.04% | 0.05% |
The Small-Cap Gap
Both funds come from the same family of FTSE Russell indexes, which splits every market into size bands. The All-World indexes combine the large and mid bands; the Global All Cap indexes add the small band. So VXUS's index contains all of VEU's index plus the small band, and the fund holds roughly 4,900 more stocks, almost all of them smaller businesses in Japan, Europe, Canada, Australia and emerging markets.
Those extra stocks outnumber VEU's entire portfolio, but they do not dominate VXUS. Both funds weight companies by market value, and small companies are small by definition, so the large and mid caps still make up most of VXUS's assets. In practice the two funds tend to move closely together; the small-cap slice nudges VXUS's results rather than steering them.
Whether you want that slice is a judgment about diversification, not a right answer. Small companies add a different set of businesses and can behave differently from large ones over long stretches, in both directions. If you already hold international small caps in a separate fund, VEU avoids doubling up. If you want one fund that covers everything outside the U.S., VXUS does that.
The Fee Gap Is One Basis Point
VEU is cheaper, 0.04% against 0.05%. On a $100,000 international allocation that is a $10 a year difference. It is real money over decades, but it is small next to the question of which companies you want to own. For most investors the fee should be a tie-breaker here, not the decision.
Which One Fits You
- Choose VXUS if you want a single fund for all of your international stocks, small companies included. It is the more complete of the two.
- Choose VEU if you want only large and mid caps, or you hold international small caps separately and do not want the overlap.
- Do not hold both. VEU's companies are already inside VXUS, so combining them only overweights the large and mid caps you already own.
If you are deciding how much to hold outside the U.S. at all, read VTI vs VXUS. For a single fund that holds both U.S. and international stocks, see VT vs VXUS.
FAQ
What is the difference between VEU and VXUS?
VEU holds large and mid-sized companies outside the U.S.; VXUS holds those plus small companies. VXUS owns 8,790 stocks, VEU 3,856.
Is VEU cheaper than VXUS?
Slightly. VEU's expense ratio is 0.04% and VXUS's is 0.05%.
Does VEU include emerging markets?
Yes. Both funds hold developed and emerging markets outside the U.S.
Does VXUS contain everything in VEU?
At the index level, yes. VXUS's index adds the small-cap band to the same large and mid caps that make up VEU's index. The funds' exact holdings can differ slightly from their indexes.
Should I own VEU and VXUS together?
No. Because VEU sits inside VXUS, holding both just increases your weight in the large and mid caps.
This article is for general information and is not investment advice. Fund figures were taken from Vanguard's published fund pages on 2026-09-23 and can change; confirm current figures before you invest.