VSS vs. MSFT

Last updated Jun 9, 2026

VSS (Vanguard FTSE All-World ex-US Small-Cap ETF) is Foreign Small & Mid Cap Equities fund tracking the FTSE Global Small Cap ex US Index, while MSFT (Microsoft Corporation) is a stock. Over the past 10 years, VSS returned 7.98%/yr vs 24.64%/yr for MSFT. A 0.52 correlation means they provide meaningful diversification when combined.

Performance

VSS vs. MSFT - Performance Comparison

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

Returns By Period

In the year-to-date period, VSS achieves a 7.74% return, which is significantly higher than MSFT's -14.48% return. Over the past 10 years, VSS has underperformed MSFT with an annualized return of 7.98%, while MSFT has yielded a comparatively higher 24.64% annualized return.

VSS

• 1D: 0.02%
• 1M: -4.88%
• YTD: 7.74%
• 6M: 10.30%
• 1Y: 22.83%
• 3Y*: 15.44%
• 5Y*: 5.25%
• 10Y*: 7.98%

MSFT

• 1D: -1.18%
• 1M: -0.60%
• YTD: -14.48%
• 6M: -15.77%
• 1Y: -11.77%
• 3Y*: 8.85%
• 5Y*: 11.09%
• 10Y*: 24.64%

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

VSS vs. MSFT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	7.74%	29.61%	2.94%	15.52%	-21.48%	13.05%	11.81%	21.36%	-18.48%	30.61%
MSFT Microsoft Corporation	-14.48%	15.58%	12.93%	58.19%	-28.02%	52.48%	42.53%	57.56%	20.80%	40.73%

Correlation

The correlation between VSS and MSFT is 0.30, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.30
Correlation (3Y) Calculated over the trailing 3-year period	0.35
Correlation (5Y) Calculated over the trailing 5-year period	0.47
Correlation (10Y) Calculated over the trailing 10-year period	0.51
Correlation (All Time) Calculated using the full available price history since Apr 6, 2009	0.52

Over the past year, the correlation between VSS and MSFT has dropped to 0.30 - well below their long-term average of 0.52, suggesting their price drivers have been diverging.

Return for Risk

VSS vs. MSFT — Risk / Return Rank

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

VSS

VSS Risk / Return Rank: 47
VSS Sharpe Ratio Rank: 48
VSS Sortino Ratio Rank: 46
VSS Omega Ratio Rank: 49
VSS Calmar Ratio Rank: 44
VSS Martin Ratio Rank: 49

MSFT

MSFT Risk / Return Rank: 24
MSFT Sharpe Ratio Rank: 21
MSFT Sortino Ratio Rank: 21
MSFT Omega Ratio Rank: 20
MSFT Calmar Ratio Rank: 31
MSFT Martin Ratio Rank: 28

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.

VSS vs. MSFT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) and Microsoft Corporation (MSFT). 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.

	VSS	MSFT	Difference
Sharpe ratio: Return per unit of total volatility	1.50	-0.47	+1.97
Sortino ratio: Return per unit of downside risk	2.06	-0.49	+2.55
Omega ratio: Gain probability vs. loss probability	1.28	0.94	+0.34
Calmar ratio: Return relative to maximum drawdown	1.97	-0.35	+2.32
Martin ratio: Return relative to average drawdown	7.54	-0.73	+8.27
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VSS vs. MSFT - Sharpe Ratio Comparison

The current VSS Sharpe Ratio is 1.50, which is higher than the MSFT Sharpe Ratio of -0.47. The chart below compares the historical Sharpe Ratios of VSS and MSFT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VSS	MSFT	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.50	-0.47	+1.97
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.32	0.42	-0.10
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.46	0.91	-0.45
Sharpe Ratio (All Time) Calculated using the full available price history	0.54	0.74	-0.21

Drawdowns

VSS vs. MSFT - Drawdown Comparison

The maximum VSS drawdown since its inception was -43.51%, smaller than the maximum MSFT drawdown of -69.38%. Use the drawdown chart below to compare losses from any high point for VSS and MSFT.

Drawdown Indicators

	VSS	MSFT	Difference
Max Drawdown Largest peak-to-trough decline	-43.51%	-69.38%	+25.87%
Max Drawdown (1Y) Largest decline over 1 year	-11.62%	-33.91%	+22.29%
Max Drawdown (3Y) Largest decline over 3 years	-15.73%	-33.91%	+18.18%
Max Drawdown (5Y) Largest decline over 5 years	-33.93%	-37.15%	+3.22%
Max Drawdown (10Y) Largest decline over 10 years	-43.51%	-37.15%	-6.36%
Current Drawdown Current decline from peak	-5.08%	-23.56%	+18.48%
Average Drawdown Average peak-to-trough decline	-9.64%	-21.78%	+12.14%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.04%	16.13%	-13.09%

Volatility

VSS vs. MSFT - Volatility Comparison

The current volatility for Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) is 5.87%, while Microsoft Corporation (MSFT) has a volatility of 10.25%. This indicates that VSS experiences smaller price fluctuations and is considered to be less risky than MSFT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VSS	MSFT	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.87%	10.25%	-4.38%
Volatility (6M) Calculated over the trailing 6-month period	13.18%	22.36%	-9.18%
Volatility (1Y) Calculated over the trailing 1-year period	15.28%	25.31%	-10.03%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.53%	26.64%	-10.11%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.30%	27.06%	-9.76%

Dividends

VSS vs. MSFT - Dividend Comparison

VSS's dividend yield for the trailing twelve months is around 3.15%, more than MSFT's 0.86% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
MSFT Microsoft Corporation	0.86%	0.70%	0.73%	0.74%	1.06%	0.68%	0.94%	1.20%	1.69%	1.86%	2.37%	2.33%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	3.15%	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 VSS and MSFT in my portfolio?

VSS and MSFT have a correlation of 0.30, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VSS or MSFT?

MSFT has higher volatility (10.25%) compared to VSS (5.87%). In terms of maximum drawdown, VSS dropped -43.51% vs MSFT's -69.38%.

Which has better risk-adjusted returns?

VSS currently has the higher Sharpe Ratio (1.50 vs -0.47), 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.