VGS tracks the MSCI World ex-Australia Index, with approximately 73% allocated to US companies across roughly 1,275 holdings in developed markets. VEU tracks the FTSE All-World ex-US Index, with zero US exposure and includes both developed and emerging markets. The two ETFs serve completely different geographic roles in a portfolio. General information only — not financial advice.
See live overlap and the geographic split in our VEU vs VGS comparison tool.
Key findings (as at Q2 2026)
- VGS is roughly 72% US, covering developed markets only. VEU excludes the US entirely and includes emerging markets.
- VGS charges 0.18% p.a. and VEU charges 0.04% p.a..
- Overlap is approximately 62% — the geographic split means the two funds hold very different companies.
- General information only, not financial advice.
VGS and VEU are both Vanguard ETFs and both give Australian investors international shares exposure, but they cover completely different parts of the global market. VGS is built around developed markets with a heavy US weight. VEU explicitly excludes the US and adds emerging markets. The choice between them isn't "Vanguard A vs Vanguard B" — it's a deliberate decision about how much US exposure to carry and whether to include emerging markets. General information only, not financial advice.
At a glance
| VGS | VEU | |
|---|---|---|
| Full name | Vanguard MSCI Index International Shares ETF | Vanguard All-World ex-US Shares Index ETF |
| Index tracked | MSCI World ex-Australia | FTSE All-World ex-US |
| US weight | Approximately 72% | 0% |
| Emerging markets? | No (developed only) | Yes (included) |
| Holdings | ~1,275 | ~3,858 |
| MER | 0.18% p.a. | 0.04% p.a. |
| Fund size (Q2 2026) | $15.5B | $65.6B |
| Trailing yield | approximately 1.6% | approximately 2.8% |
| Distributions | Quarterly | Quarterly |
| Franking credits | No | No |
What is VGS?
VGS is the Vanguard MSCI Index International Shares ETF. It tracks the MSCI World ex-Australia Index, holding approximately 1,275 large and mid-cap companies across 23 developed markets. The United States is by far the largest component at around 72%, followed by Japan, the United Kingdom, France, Canada and Switzerland. VGS does not include emerging markets such as China, India or Brazil. For a fuller walkthrough of VGS specifically, see the VGS review.
What is VEU?
VEU is the Vanguard All-World ex-US Shares Index ETF — a cross-listing of the US-domiciled VEU. It tracks the FTSE All-World ex-US Index, which holds large, mid and small-cap companies across both developed and emerging markets, with US-listed companies excluded by design. Europe, Japan and emerging markets (China, Taiwan, India, Brazil and others) make up the bulk of the fund. VEU holds approximately 3,858 companies in total.
The US exposure question
This is the central decision. An investor who buys VGS gets roughly 72 cents of every dollar in US-listed companies. An investor who buys VEU gets zero US exposure. They are not substitutes for one another — they cover different parts of the global market by design. An investor who wants global coverage without doubling down on the US-heavy weighting of an MSCI World fund might pair VEU with a separate US fund (e.g. IVV) at a chosen US weight, rather than accept the ~72% US weight that VGS embeds.
Emerging markets: VEU includes them, VGS does not
VGS tracks a developed-markets index. Emerging-market countries (China, India, Brazil, Taiwan, Mexico and others) are excluded by definition. VEU includes them as part of the FTSE All-World ex-US methodology. Emerging markets bring different return drivers, different sector mixes (more financials and materials, less technology relative to the US), and different volatility characteristics. They are also a meaningful share of global GDP that is not reflected in developed-market-only indices.
Holdings overlap
Overlap is approximately 62% (as at Q2 2026). Because VGS is mostly US and VEU explicitly excludes the US, the two funds hold very different companies. Where overlap exists, it is in non-US developed markets — large Japanese, European and Canadian businesses that are in both the MSCI World ex-Australia universe (developed markets ex-AU) and the FTSE All-World ex-US universe (everything ex-US). The ETFLens overlap checker shows the live figure.
Distribution comparison
VGS's trailing yield is approximately 1.6% and VEU's is approximately 2.8% (as at Q2 2026). VEU has historically run a higher yield because non-US markets — particularly Europe — tend to have higher dividend payout ratios than the tech-heavy US market that dominates VGS. Distributions are not guaranteed and vary each period.
Performance
VGS has returned 15.1% over one year, 16.1% p.a. over three years and 12.8% p.a. over five years. VEU has returned 18.8% over one year, 14.6% p.a. over three years and 10.0% p.a. over five years. Past performance is not a reliable indicator of future returns. The post-2020 period was unusually favourable for US shares relative to ex-US shares; a different mix of factors could produce a different pattern in future periods.
Can you hold both?
Some investors hold both VGS and VEU, or pair VEU with a US-only fund like IVV. The objective in either case is the same: to set the US weight deliberately rather than accept the ~72% baked into VGS. Holding VGS + VEU does mean some of the underlying global exposure (the non-US developed-markets portion of VGS) is duplicated, so it is not a substitute for a careful look at the geographic mix. This is a deliberate allocation decision, not a default — general information only, not financial advice.
Who may suit VGS
VGS may suit you if you want a single-fund global developed-markets exposure with the US weight that an MSCI World ex-Australia index produces. The fund is straightforward and widely held.
Who may suit VEU
VEU may suit you if you specifically want ex-US international exposure including emerging markets — typically as part of a portfolio that sets the US weight elsewhere via a US-only fund. It is not designed to be a standalone global allocation.
This is general information only and not a recommendation to buy or not buy either fund. Consider seeking advice from a licensed financial adviser who can assess your specific circumstances.
See the full side-by-side breakdown: holdings overlap, geographic split and fee difference in dollars.
Compare VEU vs VGS on ETFLens →General information only. Not financial advice. This article does not consider your personal financial situation, objectives or needs. Past performance is not a reliable indicator of future returns. MER and fund size data reported from fund manager disclosures, reviewed quarterly. Always check the current PDS for the most recent fee and holdings information before investing. ETFLens does not hold an Australian Financial Services Licence. Always read the relevant PDS and consider seeking advice from a licensed financial adviser (AFS licence holder) before making any investment decisions.