Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares (VSS)

Overview

The Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) seeks to track the performance of the FTSE Global Small Cap ex US Index. It provides exposure to a wide range of small-capitalization stocks located in developed and emerging markets outside the United States, offering diversification beyond domestic investments. The ETF is passively managed, employing a full-replication technique.

Reputation and Reliability

Vanguard is highly regarded for its low-cost, index-tracking investment products and strong reputation for reliability.

Management Expertise

Vanguard has extensive experience and expertise in managing index funds and ETFs, leveraging a large team of investment professionals.

Goal

The investment objective is to track the performance of a benchmark index that measures the investment return of small-capitalization stocks of companies located in developed and emerging markets, excluding the United States.

Investment Approach and Strategy

Strategy: This ETF aims to track the FTSE Global Small Cap ex US Index.

Composition The ETF primarily holds stocks. The investment universe consists of small-cap companies from various countries outside the United States.

Market Share: VSS's market share is notable within the global ex-US small-cap ETF category, though it is not the sole dominant player.

Total Net Assets (AUM): 14100000000

Key Competitors

• SPDR S&P International Small Cap ETF (GWX)
• iShares MSCI EAFE Small-Cap ETF (SCZ)
• Schwab International Small-Cap Equity ETF (SCHC)

Competitive Landscape

The market is moderately competitive, with several ETFs offering exposure to international small-cap stocks. VSS benefits from Vanguard's low-cost structure. Disadvantages include slightly lower trading volume compared to some larger competitors.

Historical Performance: Historical performance data is variable and depends on the time periods chosen; it is directly related to the performance of the underlying FTSE Global Small Cap ex US Index.

Benchmark Comparison: The ETF's performance closely tracks its benchmark, the FTSE Global Small Cap ex US Index, with minor deviations due to expenses and tracking error.

Expense Ratio: 0.07

Average Trading Volume

The average trading volume for VSS is adequate for most investors, facilitating relatively easy buying and selling of shares.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating relatively low transaction costs for investors.

Market Environment Factors

Global economic growth, currency fluctuations, and political stability in various countries significantly impact the ETF's performance. Sector growth prospects within the international small-cap space also influence returns.

Growth Trajectory

The ETF's growth is tied to the overall performance of international small-cap equities and any changes in the composition of the underlying index. There are no major changes to strategy and holdings.

Competitive Edge

VSS's competitive advantage stems primarily from Vanguard's ultra-low expense ratio. This gives it an edge over competitors by minimizing the cost to investors. It also benefits from broad diversification across numerous international small-cap stocks. The passive management style ensures consistent tracking of the benchmark, appealing to investors seeking index-like returns.

Volatility

The ETF's volatility is generally higher than broader market ETFs due to the focus on small-cap stocks, which tend to be more volatile. International investments also carry currency risk.

Market Risk

The ETF is subject to market risk related to fluctuations in international equity markets and economic conditions in the countries represented in the index.

Ideal Investor Profile

The ideal investor is one who is seeking diversified exposure to international small-cap equities as a component of a broader portfolio and can tolerate higher volatility.

Market Risk

This ETF is best for long-term investors seeking diversification and willing to accept the risks associated with small-cap and international investing. It suits passive index followers.

The Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) offers investors a cost-effective way to gain exposure to a broad portfolio of international small-cap stocks. Its low expense ratio and passive management strategy make it an attractive option for those seeking index-like returns. However, investors should be aware of the inherent risks associated with small-cap and international investing, including higher volatility and currency risk. It closely tracks the FTSE Global Small Cap ex US Index providing a transparent and diversified investment vehicle. The ETF's performance is contingent upon the performance of international small-cap equities.

Data Sources:

• Vanguard.com
• FactSet
• Morningstar

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.