A Simple Vanguard ETF to Consider If You Believe U.S. Stocks Are Overpriced

February 12, 2026

Market Update on S&P 500

The S&P 500 began this year with some challenges but has still managed to gain 75% over the last five years. However, at a P/E ratio of 30x, it seems rather pricey historically. Notably, much of this increase is attributed to a few major tech companies, like Nvidia, Microsoft, and Apple, rather than a broader market movement.

If you’re feeling that U.S. stocks might be overvalued right now, it may not be the ideal moment to dive into hot stocks like the Vanguard S&P 500 ETF (NYSEMKT: VOO). Conversely, this could be a better time to consider investing in the Vanguard Total International Stock ETF (NASDAQ: VXUS), which provides wider exposure to overseas markets.

VXUS includes a diverse array of 8,646 stocks, and it tracks the FTSE Global All Cap ex US Index, all for a low expense ratio of 0.05%. In terms of allocation, 26.8% is invested in emerging markets, while 38.2% goes to Europe, 25.6% to Asia Pacific, and 8.1% to North America, with the rest diversified across other regions. Interestingly, just three stocks—TSMC, Tencent, and ASML—represent over 1% of its portfolio.

Since the start of the year, VXUS has risen by 9%, while the S&P 500 has held steady. It’s possible that stocks will continue their upward trend as more investors look to diversify away from the hot U.S. market.

Before you consider purchasing shares of the Vanguard Total International Stock ETF, it’s worth noting some insights from investing analysts. They’ve highlighted what they believe are the best stocks to buy right now, and, interestingly enough, the Vanguard Total International Stock ETF isn’t among them. These recommended stocks are thought to have strong potential for returns in the coming years.

For context, some notable returns from past recommendations include Netflix and Nvidia, which, had you invested $1,000 back then, would have turned into $429,385 and $1,165,045, respectively. The average return from the Stock Advisor program has been an impressive 913%, significantly surpassing the S&P 500’s 196%.

So, if you’re considering where to invest your money, it might be a good idea to keep an eye on these recommendations. There’s a community of retail investors sharing this information, and joining it could provide some valuable insights.