VXUS and IXUS are both total international stock ETFs — they hold stocks from developed and emerging markets worldwide. They're nearly identical in what they do, but the differences matter for your Roam slot.
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| Feature | VXUS | IXUS |
|---|---|---|
| Sponsor | Vanguard | iShares (BlackRock) |
| Expense Ratio | 0.08% | 0.12% |
| AUM | ~$35B+ | ~$6B |
| Countries covered | ~49 countries (developed + emerging) | ~49 countries (developed + emerging) |
| Holdings | ~3,900 stocks | ~1,700 stocks |
| Distribution | Quarterly | Quarterly |
Both funds track broad international stock indexes that include developed and emerging markets. They hold thousands of stocks across roughly 49 countries — everything from Apple's international subsidiaries to Toyota, Samsung, Nestlé, and thousands of smaller companies.
VXUS wins on fees: 0.08% vs 0.12%. That's a 0.04% difference, which translates to $4/year on every $10,000 invested. Over 20 years with compounding, that difference grows — but it's still modest in absolute terms.
VXUS holds more stocks (~3,900 vs ~1,700), which means slightly broader coverage of small-cap international companies. IXUS focuses on large and mid-cap stocks, which represent the bulk of international market value anyway.
The performance difference from coverage is negligible — both funds track the same underlying markets, just with different methodology. In practice, their returns are nearly identical year over year.
Both funds distribute foreign tax credits that can offset US taxes on dividends. This is a feature of all international ETFs — you get credit for taxes paid to foreign governments, which reduces your overall tax burden.
VXUS has significantly higher AUM (~$35B vs ~$6B), which translates to tighter bid-ask spreads and easier trading. For a buy-and-hold investor (which you should be in the Roam slot), this matters less — but it's still a factor.
For your Roam slot — international diversification to reduce US-centric risk — VXUS is the better choice. Here's why:
IXUS isn't wrong — it's a solid international ETF with broad coverage. But VXUS edges it out on every metric that matters for long-term investors: fees, liquidity, coverage breadth, and fund structure.
Some investors argue that international stocks are overvalued relative to US stocks, or that the US market's dominance is permanent. Others argue that diversification across geographies reduces risk regardless of short-term performance.
The Five Fund Frame takes the diversification view. Your Roam slot exists because no one can predict which markets will outperform. Holding 15-25% in international stocks ensures you participate in global growth, not just US growth.
Pick your life stage, set your allocations, and see every dollar assigned to its job across all five slots.
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