Australians have invested a lot in US shares over the past two years amid the S&P 500 Index (SP: INX) significantly outperforming the ASX 200.
But US President Donald Trump is making investors nervous this year.
When Trump announced the US reciprocal tariffs, the S&P 500 spiralled close to official bear market status (a 20% fall from the most recent peak) and the ASX 200 entered an official market correction (10% off the most recent peak).
Could it be time to diversify your international shares investments away from the US?
Image source: Getty Images
What is the VEU ETF?
One ASX ETF that allows you to invest everywhere outside the US is the Vanguard All-World ex-US Shares Index ETF (ASX: VEU).
The VEU ETF holds a portfolio of 3,823 international stocks in major developed and emerging countries.
Just over 15% of its holdings are in Japan, 9% are in China, and another 9% are in the United Kingdom.
About 6% of its holdings are in France, with another 6% in Canada.
More than 75% of its holdings are large-cap shares.
The VEU ETF seeks to track the FTSE All-World ex-US Index before fees.
According to March data from ASX, the VEU ETF has $3,712 million in funds under management (FUM).
Let's look back and see how well the VEU ETF has performed for Australian investors over the past year.
Has investing outside the US served ASX investors well?
The VEU ETF closed at $98.50 yesterday, up 0.33%.
This time last year, the VEU closed at $89.45 apiece.
If you had put $10,000 into the VEU ETF on 8 May last year, it would have bought you 111 units (for $9,928.95).
There's been a capital gain of $9.05 per unit since then, which equates to $1,004.55 for your portfolio of 111 units.
But what about dividends (or distributions, as they are called with ETFs)?
Since 8 May 2024, VEU has paid four lots of dividends.
The VEU ETF paid investors 45.89 cents per unit on 19 July last year. The ETF then paid 24.70 cents per unit on 18 October.
VEU investors also received 94.03 cents per unit on 22 January this year and 19.07 cents per unit on 22 April.
All up, that is 183.69 cents per unit, which adds $203.89 worth of annual income from your 111 VEU ETF units.
Grand total…
Your capital gain of $1,004.55 plus your distributions of $203.89 gives you a total return in dollar terms of $1,208.44.
You invested $9,928.95 buying your 111 units of VEU on 8 May.
This means you have received a total return, in percentage terms, of 12.17%.
Your portfolio of VEU ETF units is now worth $11,137.39.
