VXUS rated 'hold' amid expected growth and inflation challenges in global ex-US equities.

The analyst assigns a 'hold' rating to the Vanguard Total International Stock Index Fund (VXUS), citing concerns about accelerating growth and persistent inflation in the second half of the year, which could negatively impact global ex-US equities. The US market now represents 64% of global market capitalization, supported by stronger earnings compared to other regions. While US, Japan, and Eurozone equities trade above historical price-to-earnings averages, only emerging markets appear fairly valued. Disruptive sectors like memory, AI, and defense may also affect VXUS's performance relative to the global market. The analyst remains cautious given these factors and does not currently recommend buying VXUS.