SWISX vs VXUS: Key Differences Every Investor Should Know
When comparing Schwab’s SWISX and Vanguard’s VXUS, international investors often turn to Reddit to weigh their options. Both funds provide exposure to non-U.S. markets, but critical differences shape their appeal:
- Index Tracked: SWISX follows the MSCI EAFE Index (developed markets ex-U.S. and Canada), while VXUS tracks the FTSE Global All Cap ex US Index (includes emerging markets and Canada).
- Expense Ratio: SWISX costs 0.06%; VXUS costs 0.07%—a negligible difference.
- Market Coverage: VXUS offers broader diversification with 7,900+ stocks vs. SWISX’s 1,400+.
- Structure: SWISX is a mutual fund; VXUS is an ETF (more tax-efficient).
Performance Showdown: SWISX vs VXUS
Historical returns highlight how their strategies play out. Over the past decade, SWISX’s focus on developed markets like Japan and Europe delivered steadier but slower growth. Meanwhile, VXUS’s inclusion of emerging markets (e.g., China, India) led to higher volatility but potential for greater long-term gains. Reddit users note that VXUS outperformed SWISX in bull markets but lagged during global downturns.
What Reddit Says About SWISX and VXUS
Scouring threads like r/investing and r/Bogleheads reveals polarized opinions:
- SWISX Fans: Praise its simplicity and lower risk. One user wrote, “I sleep better knowing I’m not exposed to emerging market chaos.”
- VXUS Advocates: Argue its diversification is worth the slight cost. A popular comment states, “Missing emerging markets is like ignoring 25% of the world’s economy.”
- Tax Concerns: Multiple threads warn against holding SWISX in taxable accounts due to capital gains distributions.
SWISX vs VXUS: Which Is Right for You?
Choose SWISX if:
- You want to avoid emerging markets
- You use Schwab and prefer mutual funds
- Lower volatility aligns with your risk tolerance
Choose VXUS if:
- You seek maximum diversification
- Tax efficiency is a priority (e.g., taxable accounts)
- You’re comfortable with short-term swings for potential growth
FAQs: SWISX vs VXUS Answered by Reddit
Q: Does SWISX include Canadian stocks?
A: No. SWISX excludes Canada, while VXUS includes it.
Q: Can I buy VXUS on Schwab?
A: Yes, but Schwab charges a commission for Vanguard ETFs. Consider SCHF (Schwab’s ETF alternative) for fee-free trading.
Q: Which fund has higher dividend yields?
A: SWISX historically yields ~3%, slightly above VXUS’s ~2.8%, due to its focus on dividend-heavy developed markets.
Q: Is VXUS better for long-term holding?
A: Reddit’s Boglehead community overwhelmingly says yes, citing its all-in-one diversification and tax advantages.
Final Thoughts
Both SWISX and VXUS offer low-cost international exposure, but your choice hinges on risk appetite and strategy. SWISX suits cautious investors prioritizing stability, while VXUS appeals to those betting on global growth. As Reddit users emphasize: diversify wisely, mind the tax implications, and stay invested long-term.
