Why This Vanguard Global Ex-Canada Stock ETF is Rated Gold

Key Morningstar Metrics for Vanguard FTSE Global All Cap ex Canada Index ETF

• Morningstar Medalist Rating: Gold
• Process Pillar: High
• People Pillar: Above Average
• Parent Pillar: High
• MER: 0.22%

Vanguard FTSE Global All-Cap ex Canada Index ETF VXC captures nearly all markets outside of Canada for a reasonable price.

The fund tracks the FTSE Global All-Cap ex Canada China A Inclusion Index. Its broad portfolio includes stocks of all sizes from developed and emerging markets outside of Canada. It weights its holdings by market cap, which captures the market’s consensus opinion of each stock’s relative value while mitigating turnover. Market-cap weighting can be tough to beat because the market tends to do a good job of pricing stocks over the long run. Occasionally, this overexposes the fund to expensive stocks, but this doesn’t undermine its long-term efficacy.

Broad diversification mitigates the impact of the worst performers on the fund’s overall performance. The target index holds more than 10,000 stocks, and the managers nearly replicate its portfolio through the use of four exchange-traded funds. Diversification benefits extend to the fund’s regional exposures. It captures nearly all of the global market cap outside of Canada, with US stocks collecting around 65% of the portfolio by the end of December 2025.

Stocks from emerging markets typically make up just over 10% of the portfolio. These markets can be more volatile, but their relatively small allocation shouldn’t heavily impact long-term fund performance or risk. The same can be said about small-cap stocks. Their inclusion improves the fund’s breadth but still accounts for a small percentage of the portfolio owing to market-cap weighting.

The fund has consistently beaten its peers. It beat the Canada global equity Morningstar Category average by 2.56 percentage points annualized from its June 2014 inception through December 2025. Its 0.22% management expense ratio was among the lowest decile of its peers and provides the fund a durable edge.

Vanguard FTSE Global All Cap ex Canada Index ETF: Performance Highlights

Broad diversification and low fees drive superior returns. The fund outperformed the Canada global equity category average by 2.56 percentage points annualized from its June 2014 inception through December 2025, returning 9.37% annualized over that time. Risk-adjusted returns were also significantly above that of the category; its Sharpe ratio of 0.56 was 44% higher than the category norm of 0.39 for the same period. Similar volatility to its average peer allowed the fund’s excess return to carve out a sturdy risk-adjusted return advantage.

Historical outperformance has largely been attributable to excluding Canadian stocks. The result is a slight preference for US stocks, which have led global market returns since 2014. US stocks won’t always outperform, but the fund’s 35% allocation to emerging and developed markets outside of North America improves breadth and reduces its reliance on US stocks.

Going forward, the fund’s expansive portfolio and low fees should continue to deliver strong results.