The casino game of roulette has a slight advantage in favor of the house. However, an interesting strategy of hedging against loss involves playing several different scenarios. Dubbed the “James Bond Strategy”, it is essentially a flat-bet system that covers 67% of the table.
The Goal: Bettor places $140 on high numbers (19-36), $50 on a six-line (13-18), and $10 on zero. The Risk: Bettor loses the entire stake if any number from 1 to 12 is hit.
As US stocks sell off, gaining exposure to rising international market equities is a prudent hedging strategy. Shifting even a small 10-20% of one’s portfolio away from a 100% US concentration from a rebalancing perspective may offset against further US stock sell offs, which already have taken a big chunk out of 2025 gains in Q1 2026. Two international ETFs worth one’s consideration are:
- Vanguard FTSE Europe ETF (NYSE: VGK | VGK Price Prediction)
- Vanguard Total International Stock Index Fund ETF Shares (NASDAQ: VXUS
Given that international diversification was an effective strategy during the last tariff-driven sell-off between the US and China in 2018, it appears that the formula still works, based on results to date.
Vanguard FTSE Europe ETF
VGK is an ETF that contains stocks from developed markets in Europe and Scandinavia.
The Vanguard FTSE Europe ETF tracks the FTSE Developed Europe All Cap Index, which covers stocks from the Eurozone and Scandinavia. Issued by Vanguard, the second largest asset manager in the world after BlackRock, VGK is a passively managed ETF with an inception date of 3-4-2005. After March 2026 erased nearly all of the gains made from November 2025 through February 2026, VGK has steeply climbed back to within roughly 3 points of its 52-week high, at the time of this writing. VGK also has a Morningstar gold medalist rating.
|
Net Assets |
$36.61 billion |
Avg. Daily Volume |
4.28 million shares |
|
Yield |
3.01% |
YTD Return |
4.63% |
|
52 Wk. Range |
$62.02-$90.75 |
1-Year return |
35.09% |
|
Beta |
0.99 |
3-Year return |
14.29% |
|
Expense Ratio |
0.06% |
5-Year Return |
9.04% |
|
P/E Ratio |
18.35 |
10-Year Return |
8.88% |
The top 10 holdings of VGK are:
- ASML Holding – 3.54%
- Roche Holding AG – 2.07%
- Novartis AG – 2.00%
- HSBC Holdings – 1.99%
- AstraZeneca PLC – 1.95%
- Nestle SA – 1.71%
- Shell PLC – 1.50%
- Siemens – 1.31%
- SAP SE – 1.28%
- Banco Santander SA – 1.16%
Vanguard Total International Stock Index Fund ETF Shares
VXUS contains over 8,000 stocks from both developed and emerging market nations from around the globe.
Using the FTSE Global All Cap ex-USA Index as its benchmark, VXUS is an international equities ETF that boasts an 8,560 stock name portfolio. Drawing from Europe, PacRIm and Emerging Markets from around the globe, VXUS returned approximately 43% in 2025. although it also retraced somewhat in March. April has also seen a comparable VXUS revival, gaining nearly 8 points to also land 3 points shy of its 52-week high. It is one of the top retail investment choices for a broad international coverage ETF and has a Morningstar gold medalist rating.
|
Net Assets |
$582.27 billion |
Avg. Daily Volume |
9.7 million shares |
|
Yield |
2.99% |
YTD Return |
7.84% |
|
52 Wk. Range |
$54.98-$84.28 |
1-Year return |
43.51% |
|
Beta |
0.99 |
3-Year return |
15.32% |
|
Expense Ratio |
0.05% |
5-Year Return |
7.52% |
|
P/E Ratio |
17.63 |
10-Year Return |
8.75% |
Top 10 Largest Holdings:
- Taiwan Semiconductor – 3.43%
- Samsung Electronics – 1.59%
- ASML Holding NV – 1.29%
- TenCent Holdings – 0.92%
- SK hynix Inc – 0.91%
- Roche Holding AG – 0.76%
- AliBaba Group – 0.73%
- Novartis AG – 0.73%
- HSBC Holdings plc – 0.73%
- AstraZeneca plc – 0.71%
Recent Events Creating Urgency
Prime Minister Giorgia Meloni of Italy was among the first EU member nation leaders to take a hardline stance against illegal migrant immigration, which has now become EU policy.
In addition to market issues, such as a softer US dollar and increased volatility amongst tech stocks, there have been a number of recent events that might create some greater urgency in obtaining a rebalancing hedge. Some of these include:
Possible Collapse of NATO
Operation Epic Fury resulted in the devastation of the Iranian Navy’s armaments. However, the lack of support from NATO in keeping the Strait of Hormuz open has shown that NATO as a reciprocal military force for US interests is sorely lacking. President Trump has forced other NATO nations to ante up after decades of acting like scofflaws. However, should the US abandon NATO, which is so reliant on US military strength, it can likely cease as a credible and effective military alliance, which could add considerable volatility into the market.
ICE in Europe?
At the end of March, the European Parliament voted 389 to 206 in favor of “Return Regulation”, which codifies measures already exercised in Denmark and in Italy. Many believe this will lead to an escalation towards European ICE-like enforcement measures for illegal migrants and alien criminals who have been abusing the legal systems in EU member nations. Political instability may follow, which will inevitably trigger market instability.
While the gains being posted by VGK and VXUS stand on their own as justifications for portfolio addition, the potential geopolitical on the horizon may warrant urgency for investors to create their own James Bond strategies, so VGK and VXUS can certainly fill that role.
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