VXUS Outperforms ACWX on Cost Efficiency for Global Equity Exposure

VXUS, the iShares Core MSCI Total International Stock ETF, has emerged as a more economical choice for investors seeking international equity exposure compared to ACWX, the iShares MSCI All Country World ex-US ETF. VXUS charges an annual expense ratio of 0.07%, while ACWX carries a slightly higher fee of 0.10%. This 30 basis point gap translates to meaningful long-term savings, particularly for investors with large or sustained capital allocations. The cost advantage of VXUS stems from its broader tracking of the MSCI All Country World Index ex-US, which includes both developed and emerging markets. ACWX, while also covering the same universe, employs a slightly different index construction and operational structure that results in marginally higher operating costs. Despite minor differences in holdings, the two ETFs maintain high correlation, with a 99.8% tracking correlation over the past three years. For a $100,000 investment held over 10 years, the difference in fees amounts to an estimated $1,400 in cumulative cost savings when choosing VXUS over ACWX. Such savings can directly enhance net returns, especially in low-return environments. The cost efficiency is particularly appealing to robo-advisors, retirement accounts, and long-term buy-and-hold investors who prioritize total cost of ownership. Market activity around both ETFs reflects growing awareness of the cost differential. VXUS has seen a 12% increase in net asset inflows over the past quarter, while ACWX has experienced a 5% decline in inflows during the same period. This shift suggests a strategic repositioning toward lower-cost alternatives among passive investors.