Vanguard FTSE Developed Markets ETF

~4,000 large, mid and small-cap stocks from developed markets outside the US: Japan, UK, Europe and Canada, for 0.05% a year.

Why This Week?

If your portfolio is built on VOO or VTI, everything you own depends on one country. VEA is the antidote: ~4,000 companies across Japan, Europe, the UK and Canada — ASML, Nestlé, Toyota, SAP — at valuations persistently cheaper than the US and with roughly double the dividend yield, for 5 basis points. After a long era of US dominance stretched the valuation gap to historic extremes, international diversification is no longer just prudent — it's cheap.

Key Metrics

Expense Ratio

0.05%

Holdings

~4,000

AUM

$120B+

Dividend Yield

~3%

Top Holdings

5 holdings shown. Weights are approximate.

#NameWeight

ASMLASML Holding

~1.4%

SAPSAP

~1.3%

NESN.SWNestlé

~1.0%

7203.TToyota Motor

~1.0%

NOVN.SWNovartis

~0.9%

Pros & Cons

Strengths

One of the cheapest funds on earth for international exposure (0.05%).
Covers small caps too — broader than EFA-style large-cap-only indices.
Roughly double the dividend yield of the S&P 500.
Currency diversification away from an all-USD portfolio.

Risks & Weaknesses

Currency swings can dominate short-term returns in USD terms.
Developed ex-US has underperformed the US for over a decade — the thesis demands patience.
No emerging markets: pair with VWO or use VXUS for total international.
Foreign dividend withholding taxes reduce the net yield.

Alternatives Comparison

ETF	Name	TER	Focus
VEAThis Week	Vanguard FTSE Developed Markets ETF	0.05%	~4,000 large, mid and small-cap stocks from developed markets outside the US: Japan, UK, Europe and Canada, for 0.05% a year.
IEFA	iShares Core MSCI EAFE ETF	0.07%	Similar developed-markets exposure but excludes Canada and South Korea
VXUS	Vanguard Total International Stock ETF	0.08%	All-in-one international: VEA's developed markets plus emerging markets

💬 Frequently Asked Questions

VXUS is roughly VEA plus emerging markets (~75/25) in one ticker — simpler if you want one international fund. VEA makes sense if you want to control the emerging-markets dose separately (for example pairing it with VWO, our week-of-August-25 pick) or skip EM entirely. Costs are nearly identical.

No. You hold euros, yen, pounds and francs indirectly, and a weaker dollar boosts VEA's USD returns while a stronger dollar drags them. That FX exposure is part of the diversification argument — for a Chilean investor already thinking in UF and pesos, it adds a third currency layer worth understanding before buying.

Want to Explore Further?

VEA launched recently, so try backtesting SMH or SOXX as semiconductor proxies, or explore our ETF database for alternatives.

Backtest SMH + SOXX ETF Explorer

Disclaimer: ETF of the Week is educational content only. It is not investment advice, a recommendation to buy or sell, or an endorsement of any fund. Past performance does not guarantee future results. Always do your own research and consult a financial advisor before investing.