SWISX vs VXUS: An Overview
When comparing Schwab International Index Fund (SWISX) and Vanguard Total International Stock ETF (VXUS), investors are evaluating two low-cost options for international equity exposure. Both track broad international stock indexes but differ in structure, geographic coverage, and strategy. Let’s break down their similarities and differences to help you decide which aligns with your portfolio goals.
What Is SWISX?
SWISX is a mutual fund from Charles Schwab that tracks the MSCI EAFE Index, focusing on developed markets outside the U.S. and Canada. Key features include:
- Expense Ratio: 0.06% (extremely low-cost)
- Holdings: ~1,000 stocks across Europe, Australasia, and the Far East
- Exclusions: No emerging markets or small-cap stocks
- Structure: Traditional mutual fund
What Is VXUS?
VXUS is an ETF from Vanguard tracking the FTSE Global All Cap ex US Index, offering broader exposure. Key features include:
- Expense Ratio: 0.07%
- Holdings: ~8,500 stocks across developed and emerging markets
- Inclusions: Small-cap stocks and 25% emerging markets exposure
- Structure: Exchange-traded fund (ETF)
Key Differences Between SWISX and VXUS
- Market Coverage: SWISX excludes emerging markets; VXUS includes them.
- Asset Class: SWISX holds only large/mid-cap stocks; VXUS adds small-caps.
- Tax Efficiency: VXUS (as an ETF) has lower capital gains distributions.
- Minimum Investment: SWISX requires $0 at Schwab; VXUS trades per share (~$100).
- Trading Flexibility: VXUS trades intraday; SWISX settles after market close.
Performance Comparison
Over the past decade, SWISX and VXUS have shown similar annualized returns (~6-7%), but differences emerge:
- VXUS’s emerging markets exposure led to higher volatility during crises.
- SWISX outperformed slightly in strong Eurozone markets.
- VXUS’s small-cap stocks boosted returns during global growth periods.
Which Fund Is Better for Your Portfolio?
- Choose SWISX If: You want ultra-low-cost developed markets exposure, prefer mutual funds, or use Schwab’s platform.
- Choose VXUS If: You prioritize comprehensive global diversification, tax efficiency, or trade ETFs frequently.
FAQ: SWISX vs VXUS
1. Can I hold both SWISX and VXUS?
Yes, but they overlap significantly. SWISX covers 75% of VXUS’s holdings. Combine only if targeting specific regional allocations.
2. Which has higher dividends?
SWISX yields ~2.8% vs VXUS’s ~3.1% due to emerging markets exposure. Both pay quarterly.
3. Are these funds tax-efficient in taxable accounts?
VXUS is better suited for taxable accounts due to ETF tax advantages. Use SWISX in IRAs or 401(k)s.
4. Does VXUS include Canadian stocks?
Yes – VXUS includes Canada (6% of holdings), while SWISX excludes it.
5. Which platform offers these funds?
SWISX is exclusive to Schwab. VXUS trades commission-free on most major platforms like Vanguard, Fidelity, and Robinhood.
