Why is vxus down

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Last updated: April 8, 2026

Quick Answer: Vanguard Total International Stock ETF (VXUS) experienced a 1.2% decline on October 26, 2023, primarily due to global market volatility triggered by rising U.S. Treasury yields reaching 4.9% and concerns about China's economic slowdown. The ETF's performance is closely tied to international markets, with European stocks dropping 1.5% and emerging markets falling 2.1% during the same period. Specific factors included disappointing earnings from major European companies and renewed trade tensions affecting Asian markets.

Key Facts

VXUS declined 1.2% on October 26, 2023
U.S. 10-year Treasury yields reached 4.9% in late October 2023
European stocks dropped 1.5% during the same period
Emerging markets fell 2.1% in late October 2023
VXUS holds over 7,800 international stocks across 47 countries

Overview

Vanguard Total International Stock ETF (VXUS) is a passively managed exchange-traded fund that tracks the FTSE Global All Cap ex US Index, providing investors with exposure to international equity markets outside the United States. Launched in January 2011, VXUS has grown to become one of the largest international ETFs with approximately $50 billion in assets under management as of October 2023. The fund holds over 7,800 stocks across 47 countries, with significant allocations to developed markets like Japan (15.2%), the United Kingdom (10.1%), and Canada (7.3%), plus emerging markets including China (7.8%) and Taiwan (4.1%). VXUS has an expense ratio of just 0.07%, making it one of the most cost-effective ways to invest internationally. The fund's performance is closely tied to global economic conditions, currency fluctuations, and geopolitical events that affect international markets differently than U.S. markets.

How It Works

VXUS operates as a passively managed ETF that seeks to replicate the performance of the FTSE Global All Cap ex US Index through full replication, meaning it holds all the securities in the index in proportion to their weighting. The fund's daily price movements are determined by the collective performance of its underlying holdings across developed and emerging markets outside the United States. When international markets decline due to factors like rising interest rates, economic slowdowns, or geopolitical tensions, VXUS typically experiences corresponding price drops. The ETF's structure allows for intraday trading on exchanges, with market makers ensuring liquidity through creation and redemption of shares. Price fluctuations reflect real-time changes in the net asset value of the underlying securities, adjusted for currency exchange rates between the U.S. dollar and foreign currencies. The fund rebalances quarterly to maintain proper index alignment, with dividends from international companies distributed to shareholders monthly.

Why It Matters

Understanding VXUS performance matters because international diversification is crucial for balanced portfolios, with VXUS providing exposure to markets representing approximately 40% of global market capitalization. When VXUS declines, it signals broader international economic challenges that can impact global trade, corporate earnings, and investment returns. The October 2023 decline specifically highlighted vulnerabilities in European and emerging markets to U.S. monetary policy and Chinese economic conditions. For investors, VXUS movements provide insights into currency risks, international growth prospects, and geopolitical stability. The fund's performance affects millions of investors through retirement accounts and institutional portfolios, making its trends significant for personal finance and economic forecasting. Monitoring VXUS helps investors make informed decisions about international allocation and risk management in their investment strategies.