1 No-Brainer Vanguard ETF to Buy If You Think U.S. Stocks Are Overvalued

The Motley FoolFeb 12, 2026 8:10 PM

Key Points

The S&P 500 looks historically expensive.
It might be smarter to invest in a massive international ETF.
10 stocks we like better than Vanguard Total International Stock ETF ›

The S&P 500 has gotten off to a shaky start this year, but it's still up 75% over the past five years and looks historically expensive at 30 times earnings. Moreover, most of that rally was driven by a handful of mega-cap tech stocks, such as Nvidia, Microsoft, and Apple, rather than a broader range of stocks.

So if you think U.S. stocks are getting overvalued at these levels, it probably isn't the best time to invest in the popular Vanguard S&P 500 ETF (NYSEMKT: VOO). However, it might be the perfect time to invest in the Vanguard Total International Stock ETF (NASDAQ: VXUS), which offers broad exposure to overseas markets.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »

A digital bull climbs a rising stock chart.

Image source: Getty Images.

Why is it the right time to buy VXUS?

VXUS holds a basket of 8,646 stocks and passively tracks the FTSE Global All Cap ex US Index, with a low expense ratio of 0.05%. It allocates 26.8% of its portfolio to emerging markets, 38.2% to Europe, 25.6% to Asia-Pacific, 8.1% to North America, and the rest to other regions. The only three stocks that account for more than 1% of its portfolio are TSMC, Tencent, and ASML.

VXUS has already rallied 9% year-to-date, while the S&P 500 has stayed flat. It could continue rising as more investors diversify their portfolios away from the overheated U.S. market.

Should you buy stock in Vanguard Total International Stock ETF right now?

Before you buy stock in Vanguard Total International Stock ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Total International Stock ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $429,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,165,045!*

Now, it’s worth noting Stock Advisor’s total average return is 913% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of February 12, 2026.

Leo Sun has positions in ASML and Apple. The Motley Fool has positions in and recommends ASML, Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Tencent, Vanguard S&P 500 ETF, and Vanguard Total International Stock ETF. The Motley Fool has a disclosure policy.

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.