Key Morningstar Metrics for Vanguard FTSE Developed Europe All Cap Index ETF
- : GoldMorningstar Medalist Rating
- : HighProcess Pillar
- : Above AveragePeople Pillar
- : HighParent Pillar
Vanguard FTSE Europe ETF VE collects stocks from numerous developed European countries.
This fund tracks the FTSE Developed Europe All Cap Index, which targets large-, mid-, and small-cap stocks across developed countries in Europe. Market-cap weighting naturally reduces turnover and trading costs by channeling the market’s collective opinion of a stock’s relative value. This means stocks that do well take up a greater share of the portfolio, which can sometimes concentrate the fund in expensive stocks or market segments that have done especially well.
Country exposure has evolved with Europe’s shifting landscape. Since launching in 2005, the fund’s UK allocation has declined to about 22% from over 36% by the end of January 2026. This decline reflects the weaker relative performance of UK stocks, a trend shared across its peers. Even so, the United Kingdom remains the fund’s largest single-country weighting, which is also consistent with broad European benchmarks.
The fund’s inclusion of small-cap stocks creates only modest differences relative to peers. Market-cap weighting still anchors the portfolio in Europe’s largest companies. Sector weightings also closely resemble the category norm, favoring large companies across healthcare, financials, and industrials.
The fund holds materially less cash than its average peer, which fully exposes it to market movements. This lower cash buffer increases day-to-day volatility, but it also allows the fund to experience higher highs and lower lows through different environments.
Long-term performance has been strong. The US ETF share class outperformed the Europe stock category average by 65 basis points annualized since changing its index in 2015 and through January 2026. Its low fee and broad diversification supported this advantage and present a durable edge over peers moving forward.
Vanguard FTSE Developed Europe All Cap Index ETF: Performance Highlights
The fund accurately represents European stock market performance. Its annualized return of 9.15% beat the category average by 65 basis points annualized since changing its index in September of 2015 through January 2026.
Sector and country exposures that closely align with the category norm allow the fund’s low fee to carve out an advantage. It also maintains a significantly lower cash position than the average fund in its category, which increases volatility relative to the norm but enables full participation in market rallies. The fund tends to capture more of the category norm’s upside and downside throughout market cycles.
European stocks delivered strong results in 2025, and the fund fully participated in that strength, benefiting from its broad market exposure, low fee, and fully invested portfolio. It was the fund’s best year in the past decade, returning 35.44% in 2025, outpacing its average category peer by 2.33 percentage points.
