VEU vs. VSS

Last updated Jun 24, 2026

VEU (Vanguard FTSE All-World ex-US ETF) and VSS (Vanguard FTSE All-World ex-US Small-Cap ETF) are both exchange-traded funds - VEU is a Foreign Large Cap Equities fund tracking the FTSE All-World ex US Index, while VSS is a Foreign Small & Mid Cap Equities fund tracking the FTSE Global Small Cap ex US Index. Both are passively managed. Over the past 10 years, VEU returned 10.40%/yr vs 8.46%/yr for VSS. Their correlation of 0.95 suggests significant overlap in exposure. VEU charges 0.04%/yr vs 0.07%/yr for VSS.

Performance

VEU vs. VSS - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE All-World ex-US ETF (VEU) and Vanguard FTSE All-World ex-US Small-Cap ETF (VSS). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VEU achieves a 13.01% return, which is significantly higher than VSS's 7.79% return. Over the past 10 years, VEU has outperformed VSS with an annualized return of 10.40%, while VSS has yielded a comparatively lower 8.46% annualized return.

VEU

• 1D: -3.06%
• 1M: 0.69%
• YTD: 13.01%
• 6M: 12.81%
• 1Y: 30.08%
• 3Y*: 19.26%
• 5Y*: 8.60%
• 10Y*: 10.40%

VSS

• 1D: -2.68%
• 1M: -3.04%
• YTD: 7.79%
• 6M: 7.51%
• 1Y: 22.53%
• 3Y*: 16.03%
• 5Y*: 5.52%
• 10Y*: 8.46%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VEU vs. VSS - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VEU Vanguard FTSE All-World ex-US ETF	13.01%	32.35%	5.56%	15.84%	-15.58%	8.27%	11.10%	21.83%	-14.18%	27.40%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	7.79%	29.61%	2.94%	15.52%	-21.48%	13.05%	11.81%	21.36%	-18.48%	30.61%

Correlation

The correlation between VEU and VSS is 0.93, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.93
Correlation (3Y) Calculated over the trailing 3-year period	0.94
Correlation (5Y) Calculated over the trailing 5-year period	0.95
Correlation (10Y) Calculated over the trailing 10-year period	0.95
Correlation (All Time) Calculated using the full available price history since Apr 6, 2009	0.95

The correlation between VEU and VSS has been stable across timeframes, ranging from 0.93 to 0.95 - a consistent structural relationship.

VEU vs. VSS - Sectors Allocation Comparison

Sectors	VEU	VSS
Financial Services	22.6%	10.1%
Technology	21.6%	14.5%
Industrials	15.0%	18.7%
Consumer Cyclical	8.0%	9.1%
Basic Materials	7.1%	12.2%
Healthcare	6.7%	6.0%
Consumer Defensive	4.9%	3.5%
Energy	4.7%	4.4%
Communication Services	4.5%	2.3%
Utilities	3.0%	2.5%
Real Estate	1.9%	7.1%

Return for Risk

VEU vs. VSS — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VEU

VEU Risk / Return Rank: 56
VEU Sharpe Ratio Rank: 56
VEU Sortino Ratio Rank: 54
VEU Omega Ratio Rank: 57
VEU Calmar Ratio Rank: 55
VEU Martin Ratio Rank: 59

VSS

VSS Risk / Return Rank: 42
VSS Sharpe Ratio Rank: 42
VSS Sortino Ratio Rank: 40
VSS Omega Ratio Rank: 43
VSS Calmar Ratio Rank: 40
VSS Martin Ratio Rank: 45

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VEU vs. VSS - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE All-World ex-US ETF (VEU) and Vanguard FTSE All-World ex-US Small-Cap ETF (VSS). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VEU	VSS	Difference
Sharpe ratio: Return per unit of total volatility	1.84	1.43	+0.41
Sortino ratio: Return per unit of downside risk	2.52	1.98	+0.53
Omega ratio: Gain probability vs. loss probability	1.34	1.27	+0.07
Calmar ratio: Return relative to maximum drawdown	2.64	1.95	+0.70
Martin ratio: Return relative to average drawdown	10.12	7.24	+2.89

VEU vs. VSS - Sharpe Ratio Comparison

The current VEU Sharpe Ratio is 1.84, which is comparable to the VSS Sharpe Ratio of 1.43. The chart below compares the historical Sharpe Ratios of VEU and VSS, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VEU vs. VSS - Drawdown Comparison

The maximum VEU drawdown since its inception was -61.52%, which is greater than VSS's maximum drawdown of -43.51%. Use the drawdown chart below to compare losses from any high point for VEU and VSS.

Drawdown Indicators

	VEU	VSS	Difference
Max Drawdown Largest peak-to-trough decline	-61.52%	-43.51%	-18.01%
Max Drawdown (1Y) Largest decline over 1 year	-11.43%	-11.62%	+0.19%
Max Drawdown (3Y) Largest decline over 3 years	-13.69%	-15.73%	+2.04%
Max Drawdown (5Y) Largest decline over 5 years	-29.14%	-33.93%	+4.79%
Max Drawdown (10Y) Largest decline over 10 years	-34.98%	-43.51%	+8.53%
Current Drawdown Current decline from peak	-3.06%	-5.03%	+1.97%
Average Drawdown Average peak-to-trough decline	-13.10%	-9.62%	-3.48%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.98%	3.12%	-0.14%

Volatility

VEU vs. VSS - Volatility Comparison

Vanguard FTSE All-World ex-US ETF (VEU) has a higher volatility of 7.10% compared to Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) at 6.54%. This indicates that VEU's price experiences larger fluctuations and is considered to be riskier than VSS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VEU	VSS	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.10%	6.54%	+0.56%
Volatility (6M) Calculated over the trailing 6-month period	14.47%	13.88%	+0.59%
Volatility (1Y) Calculated over the trailing 1-year period	16.44%	15.81%	+0.63%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.30%	16.63%	-0.33%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.08%	17.17%	-0.09%

VEU vs. VSS - Expense Ratio Comparison

VEU has a 0.04% expense ratio, which is lower than VSS's 0.07% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VEU vs. VSS - Dividend Comparison

VEU's dividend yield for the trailing twelve months is around 2.56%, less than VSS's 3.24% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEU Vanguard FTSE All-World ex-US ETF	2.56%	3.09%	3.24%	3.32%	3.12%	3.08%	2.00%	3.10%	3.27%	2.66%	2.96%	2.95%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	3.24%	3.39%	3.44%	3.14%	2.30%	2.74%	1.90%	3.25%	2.80%	2.83%	2.93%	2.66%

Frequently Asked Questions

Can I hold both VEU and VSS in my portfolio?

With a correlation of 0.93, VEU and VSS move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VEU or VSS?

VEU has higher volatility (7.10%) compared to VSS (6.54%). In terms of maximum drawdown, VEU dropped -61.52% vs VSS's -43.51%.

Which ETF is better, VEU or VSS?

On 10-year performance, VEU leads with 10.40% vs 8.46% for VSS. On fees, VEU is cheaper at 0.04% per year. On volatility, VSS has been the lower-risk option at 6.54%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VEU or VSS?

Over the 10-year period, VEU has performed better with a 10.40% return vs 8.46%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VEU or VSS?

VEU is cheaper with a 0.04% expense ratio, compared with 0.07% for VSS.

Which ETF pays a higher dividend yield, VEU or VSS?

VSS has the higher dividend yield at 3.24%, compared with 2.56% for VEU.

What is the main difference between VEU and VSS?

VEU is categorized as Foreign Large Cap Equities, while VSS is Foreign Small & Mid Cap Equities. VEU tracks FTSE All-World ex US Index, while VSS tracks FTSE Global Small Cap ex US Index. Their fees differ too: 0.04% for VEU and 0.07% for VSS.

Which has better risk-adjusted returns?

VEU currently has the higher Sharpe Ratio (1.84 vs 1.43), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.