It is a passive ETF managed by Vanguard that tracks the FTSE All-World ex-US Index. It automatically holds a diversified basket of large- and mid-cap stocks in developed and emerging markets worldwide outside the US, weighted by market capitalization.

It is a global core ETF suited to asset allocation investors who want combined exposure to developed and emerging markets outside the US while excluding small caps.

It is an ETF run by Vanguard using a passive (index-tracking) approach.

The fund holds large- and mid-cap stocks in developed and emerging markets outside the US that are included in the FTSE All-World ex-US Index, weighted by market capitalization. Its key distinguishing feature is that, unlike the broad exposure of VXUS that includes small caps, it offers a more concentrated exposure limited to large and mid caps.

• Combined exposure to developed and emerging markets outside the US
• Concentrated in large and mid caps, excluding small caps
• Ultra-low-cost global ETF

Assets under management (AUM) stand at $67.3B, and the expense ratio is 0.04% per year.

Among the funds shown in the table, VEA, IEFA, and EFA are variants that give exposure only to developed markets outside the US and Canada, VXUS is a broad variant that also includes small caps, and VT is a variant with global exposure that includes the US. The key distinguishing feature of VEU is its combined exposure to large- and mid-cap stocks in developed and emerging markets.

It has shown relatively lower volatility than the US market, and depending on its emerging market weighting, volatility has partly increased during cycles of rising US interest rates and a stronger dollar.

It belongs to the group of mega-sized global ETFs that steadily attract global diversification demand and asset allocation flows. Inflows can become especially pronounced when concerns about US market valuations come to the fore.

Its main strengths are an ultra-low expense ratio and combined exposure to developed and emerging markets outside the US, while the absence of small caps and multi-currency exposure are drawbacks to consider in advance.

Among the funds shown in the table, VEA, IEFA, and EFA are variants that give exposure only to developed markets outside the US and Canada, VXUS is a broad variant that also includes small caps, and VT is a globally diversified ETF that includes the US. In addition, investors who want to add emerging markets separately can consider VWO and IEMG, and those who want to concentrate only on the US core can also look at variants such as VOO, IVV, and VTI.

Here are the points to review before investing in VEU. Its combined exposure to developed and emerging markets outside the US is a strength, but the absence of small caps, multi-currency exposure, and emerging market volatility are worth double-checking before buying, and it is advisable to review your holding weight and complementary ETF combinations as well.

The absence of small caps, multi-currency exposure, and emerging market volatility are the main factors behind short-term volatility and limits to diversification. If you want a global core asset allocation, you should also consider combining it with VT or a US ETF.

It is regarded as a standard choice for a core holding with combined exposure to large- and mid-cap stocks in developed and emerging markets outside the US. If you need broad exposure that includes small caps, VXUS fits; for single-fund exposure that includes the US, VT; and for a concentrated developed-markets-only approach, VEA and IEFA are the suitable variants.