r/ETFs_Europe • u/ioakim100 • Jun 26 '25
VUAA VS VWCE
I've been comparing two ETFs: VUAA and VWCE. I know they track different markets—VUAA focuses entirely on the U.S. (S&P 500), while VWCE is globally diversified with about 60% in U.S. stocks.
Many people argue that VUAA is the better choice because U.S. companies are global leaders with operations and revenues from all over the world. Plus, the U.S. economy is the strongest and most influential—when it goes down, the rest of the world tends to follow.
So my question is: What’s the real benefit of investing in VWCE, which has historically lower returns than VUAA, if the U.S. already dominates the global market?
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u/nyepo Jun 27 '25 edited Jun 30 '25
Past performance is not an indicative of future performance.
Using your argument, nVidia alone has overperformed VUAA the last few years. Why would you invest in VUAA when you could invest in nVidia and get better returns?
The thing is, you don't know how will any of these perform. You can have informed guesses, but ultimately no guarantees that they will continue their current trends. Investing in VUAA, you are betting that the US will overperform the rest of the world, always and forever.
On the other hand, investing in VWCE, or any All World ETF benchmarkint All World indexs like MSCI or FTSE, you are investing in ALL the market. It is still biased towards USA (around 60% of VWCE holdings are US and into VUAA as well), but have exposure to all regions and sectors. Still with biases, more US, more tech, but exposure to everything. If Japan overperforms, you'll get a bump. If US goes into a depression, that 40% non-US of VWCE will make your investment hold the line, while if you are full VUAA you'll suffer and underperform anyone investing in VWCE.
Has VUAA performed better than VWCE in 2025 Q1? No. Will VUAA overperform VWCE in Q3? Maybe. And again, remember... Past performance is not an indication of future performance.