VEA vs VEU
Vanguard FTSE Developed Markets ETF vs Vanguard FTSE All World Ex US ETF
Quick Verdict
VEA has a lower expense ratio. VEA delivered stronger 1-year returns. VEU offers more diversification with 3,928 holdings.
Side-by-Side Comparison
| Metric | VEA | VEU | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $230.3B | $68.4B | |
| Dividend Yield | 2.55% | 2.55% | |
| Holdings | 3,918 | 3,928 | |
| YTD Return | +16.41% | +14.79% | |
| 1Y Return | +27.80% | +25.82% | |
| 3Y Return (annualized) | +21.40% | +20.69% | |
| 5Y Return (annualized) | +10.32% | +9.60% | |
| Volatility (annualized) | 17.8% | 17.7% | |
| Max Drawdown | -62.9% | -62.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jul 20, 2007 | Mar 2, 2007 |
VEA vs VEU Performance
Vanguard FTSE Developed Markets ETF (VEA) is a ETF from Vanguard (US) and Vanguard FTSE All World Ex US ETF (VEU) is a ETF from Vanguard (US). Over the past year VEA returned +27.80% while VEU returned +25.82%. Year to date, VEA is up 16.41% versus a gain of 14.79% for VEU.
Over three years, VEA compounded at +21.40% per year against +20.69% for VEU; over five years the annualized figures are +10.32% and +9.60% respectively. Across the full 19-year window we track, VEU has the edge at +3.56% annualized vs +3.14%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VEA has been the more volatile fund, with annualized monthly volatility of 17.8% compared with 17.7% for VEU. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -62.9% for VEA and -62.8% for VEU. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.99. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
VEA charges 0.03% per year while VEU charges 0.04%. On a $10,000 position that is $3 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, VEA currently yields 2.55% against 2.55% for VEU.
Holdings Overlap
VEA and VEU share 935 holdings out of 5630 unique holdings combined, representing a 47.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VEA or VEU?
VEA has an expense ratio of 0.03% while VEU charges 0.04%. VEA is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VEA or VEU?
Over the past year VEA returned +27.80% vs +25.82% for VEU, so VEA leads on 1-year performance. Over the longest common window we track (19 years), VEA annualized +3.14% vs +3.56% for VEU. Past performance does not guarantee future results.
Which is riskier, VEA or VEU?
VEA has been the more volatile fund at 17.8% annualized versus 17.7% for VEU. Worst drawdown: VEA -62.9% vs VEU -62.8%.
Should I hold both VEA and VEU?
VEA and VEU have a monthly-return correlation of 0.99, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between VEA and VEU?
VEA and VEU share 935 common holdings with a 47.3% weight overlap. Combined, they hold 5630 unique securities.
Which pays a higher dividend, VEA or VEU?
VEA yields 2.55% while VEU yields 2.55%, so VEU currently pays the higher dividend yield.
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