Giving Thanks for Strong Global Markets with This Vanguard ETF

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

With a year-to-date return around 23%, the Vanguard FTSE Developed Markets ETF (VEA), and other exchange-traded funds (ETFs) like it, are giving international investors plenty of reasons to be thankful this holiday season.

2016 was undoubtedly a rough year for international markets. The unexpected outcome of Brexit, fear of more events like that one and the surprising rise of populist and nationalist movements in several countries caused members of the European Union (E.U.) to stumble. However, in 2017, the winds began blowing in favor of international markets more so than domestic markets for the first time in many years. Talk of Brexit-like events died down and pro-growth leaders such as Japan’s Shinzo Abe remained in power.

As a result, while the U.S. economy has been steadily bullish this year on the back of Trump’s pro-growth policy, international markets have actually matched or outperformed the United States year to date, as the chart below illustrates:

Vanguard Total Stock Market ETF (VTI) vs. the Vanguard FTSE All-World ex-US ETF (VEU)

How does international outperformance benefit VEA? As a developed markets fund with over $100 billion in net assets and 3,800 holdings, VEA provides excellent coverage of large-, mid- and small-cap stocks located outside the United States, including Canada. Daily average trading volume is around $320 million, so the fund sees plenty of activity.

In terms of international allocations, according to, the top countries are Japan, 21%; the United Kingdom, 15%; Canada, 8%; and Germany, 8%.  Sector allocation is dominated by financials, 24.93%; industrials, 15%; and consumer cyclicals, 12.45%, although VEA maintains allocations in a diverse array of market sectors.

Year to date, VEA has outperformed the S&P 500 by more than 5%, yet further proof of how international markets have outperformed this year. The fund has a respectable 2.5% yield and follows the trend of Vanguard funds, offering a very low expense ratio with a rate of just 0.07%. At that level, the fund’s fee is among the lowest in the segment.

VEA’s top 10 holdings, as of October 31, 2017, make up only 10.3% of total assets, which makes sense seeing as VEA has several thousand holdings. Top holdings include: U.S. Dollar, 2.36%; Nestle S.A., 1.34%; Novartis AG, 1.03%, HSBC Holdings plc, 1.02%; and Samsung Electronics, 1.02%.

For investors who are looking to play the unexpected outperformance of international markets in a diverse and broad manner, the Vanguard FTSE Developed Markets ETF (VEA) may be a good choice.

share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

previous article

I. Conservative Recommendation Markel Corporation (MKL) Trading at less than 4% of Berkshire Hathaway's (BRK-B) market cap, Markel Corporation, a holding in Smart Money Masters, is referred to as a "mini-Berkshire" for its similarity to Warren Buffett’s investment vehicle.

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Profits Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • Intelligence Report
  • Bullseye Stock Trader

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Technical Traders Alert
  • Success Trading Group

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor