If you're a fan of Australian exchange-traded funds (ETFs), you've probably either heard of the Vanguard MSCI Index International Shares ETF (ASX: VGS) or you already own it.
This ASX ETF is one of the most popular index funds on the ASX. In fact, it is currently the second-largest ETF by assets under management in Australia, holding more than $14 billion of investors' money. That's only surpassed by the Vanguard Australian Shares Index ETF (ASX: VAS).
But this ETF is an interesting one to dive into. Many investors might not be aware of exactly what their dollars are going into when they add the Vanguard International Shares ETF to their portfolio. So today, let's comprehensively answer that question by digging into this popular ASX ETF and taking a look at exactly what is in the VGS portfolio at the start of 2026.
As you might gather from its name, the VGS ETF aims to give ASX investors exposure to a broad and diversified portfolio of international shares. On the surface, the fund looks like it is fulfilling this goal nicely, with the current VGS portfolio holding (as of 30 November) almost 1,300 individual stocks, hailing from over two dozen countries. These range from Japan, Canada and France to Hong Kong, Argentina and South Africa.
So diversification ticked?
Well, not by as much as you might think.
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VGS: What's in this ASX ETF?
Yes, the Vanguard International Shares ETF does hold more than a thousand stocks from more than two dozen countries. However, those stocks, as is the case with most index funds, are weighted by market capitalisation. That means the largest stocks on the index take up more room in the VGS portfolio than smaller ones.
This means that, although there are many different names in this fund, the largest shares take up a disproportionate slice of the portfolio. So much so that out of every $100 invested in VGS units, $73.60 will go into American shares. Yep, 73.6% of VGS's weighted portfolio calls the United States of America home.
To illustrate, here are the largest ten stocks in VGS' portfolio (again, as of 30 November), and their respective weighting:
- NVIDIA Corporation (NASDAQ: NVDA) at 5.27% of the VGS portfolio
- Apple Inc (NASDAQ: AAPL) at 5.08%
- Microsoft Corporation (NASDAQ: MSFT) at 4.26%
- Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) at 4.2%
- Amazon.com Inc (NASDAQ: AMZN) at 2.74%
- Broadcom Inc (NASDAQ: AVGO) at 2.22%
- Meta Platforms Inc (NASDAQ: META) at 1.72%
- Tesla Inc (NASDAQ: TSLA) at 1.49%
- Eli Lilly & Co (NYSE: LLY) at 1.06%
- JPMorgan Chase & Co (NYSE: JPM) at 1.06%
So as you can see, VGS is very much a US-centric fund, with some international diversification sprinkled in. After the US' 73.6%, the next-largest contributor to VGS is Japan at just 5.6%. Keep this in mind when considering this ASX ETF for your portfolio in 2026.
