SWISX vs VXUS: Which International ETF Wins for Your Portfolio?

## SWISX vs VXUS: The Ultimate International ETF Showdown

Diversifying beyond U.S. stocks is crucial for long-term investing success, and ETFs like Schwab’s SWISX and Vanguard’s VXUS offer accessible international exposure. But with key differences in structure, coverage, and costs, choosing between them requires careful analysis. This SWISX vs VXUS comparison breaks down both funds to help you determine the best fit for your global investment strategy.

## What is SWISX? Schwab’s Developed Markets Play

SWISX (Schwab International Index Fund) is a low-cost mutual fund tracking the MSCI EAFE Index, focusing exclusively on developed markets outside North America. Key features include:

* **Coverage:** 1,000+ large/mid-cap stocks across 21 developed countries (e.g., Japan, UK, France)
* **Expense Ratio:** Ultra-low 0.06% with no investment minimum at Schwab
* **Structure:** Traditional mutual fund (priced/traded once daily)
* **Exclusions:** Omits emerging markets, small caps, and Canadian stocks
* **Tax Efficiency:** Less tax-advantaged than ETFs due to capital gains distributions

Ideal for cost-conscious investors seeking straightforward exposure to established international economies.

## What is VXUS? Vanguard’s All-in-One Global Solution

VXUS (Vanguard Total International Stock ETF) provides comprehensive ex-U.S. coverage as an exchange-traded fund. It tracks the FTSE Global All Cap ex US Index and stands out with:

* **Coverage:** 7,900+ stocks across developed AND emerging markets (58 countries), including small caps
* **Expense Ratio:** Competitive 0.07%
* **Structure:** ETF (intraday trading flexibility)
* **Diversification:** Represents nearly 99% of global non-U.S. market capitalization
* **Tax Efficiency:** Benefits from ETF structure with fewer taxable events

A holistic choice for investors wanting maximum diversification in one fund.

## Key Differences: SWISX vs VXUS Face-to-Face

## Which Fund Should You Choose? 4 Deciding Factors

1. **Diversification Goals:**
* Choose VXUS for true global diversification including emerging markets like China and Brazil
* Opt for SWISX if you prefer targeted developed-market exposure and hold EM separately

2. **Cost Considerations:**
* SWISX edges out with a 0.01% lower expense ratio – saving $1 annually per $10,000 invested
* Both are among the lowest-cost options globally

3. **Account & Trading Preferences:**
* SWISX suits buy-and-hold Schwab users (no commissions)
* VXUS offers flexibility for tactical traders and non-Schwab accounts

4. **Tax Efficiency:**
* VXUS’s ETF structure typically generates fewer capital gains distributions
* SWISX may create taxable events in non-retirement accounts

**Verdict:** VXUS is superior for most investors due to its unparalleled diversification. SWISX shines for Schwab loyalists prioritizing developed markets at minimal cost.

## SWISX vs VXUS: Frequently Asked Questions

**Q: Does SWISX include Canadian stocks?**
A: No. SWISX follows the MSCI EAFE Index, which excludes North America entirely.

**Q: Can I hold VXUS in a Schwab account?**
A: Yes. While Vanguard-issued, VXUS trades commission-free on Schwab like most ETFs.

**Q: Which fund has better emerging markets exposure?**
A: VXUS includes ~25% EM allocation. SWISX has zero EM holdings.

**Q: Are dividends taxed differently?**
A: Both qualify for foreign tax credits, but VXUS’s ETF structure often results in lower taxable distributions.

**Q: Which performs better historically?**
A: Performance varies by market cycle. VXUS’s EM holdings boosted returns during emerging market rallies, while SWISX sometimes outperforms in developed-market upturns.

**Final Tip:** For complete global diversification, pair either fund with a U.S. stock ETF like VTI or SCHB. Always consult a financial advisor to align choices with your risk profile.