VEU: Attractive Valuation And Limited Middle East Exposure

Ivo Kolchev1.61K FollowersFollow5ShareSavePlay(10min)CommentsSummaryThe Vanguard FTSE All-World ex US Index Fund ETF is holding onto modest gains in 2026, benefiting from attractive valuations relative to the S&P 500.VEU is principally invested in low-growth energy-importing regions, such as Europe and Japan, indicating an elevated possibility of weak earnings growth.Exposure to the Middle East is quite modest at 2.7%, while VEU's allocation to key energy crisis beneficiaries, such as Canada and Australia, stands at 11.8%.Despite near-term risks, I think VEU's valuation discount relative to the S&P 500 is excessive, ranking it a Buy.High allocation to cyclical sectors and a potential reversal of recent U.S. dollar weakness are key risks in the investment case. Hiroshi Watanabe/DigitalVision via Getty Images Introduction International stocks tracked by the Vanguard FTSE All-World ex US Index Fund ETF (VEU) have modestly outperformed the S&P 500 so far in 2026, benefiting from cheaper valuations relative to the leading U.S. benchmark. With energy prices surging and an eventualThis article was written byIvo Kolchev1.61K FollowersFollowI ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view.

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