VEA vs. VWO vs. VXUS - Which ETF for International Stocks?

Three of the most popular international ETFs are Vanguard’s VWO, VEA, and VXUS. Is there one that reigns supreme to hold alongside U.S. stocks?
// SUMMARY:
Index investors in the U.S. usually know it’s a good idea to diversify in equities outside the United States. At global market weights, U.S. stocks only comprise about half of the global market. International stocks don’t move in perfect lockstep with U.S. stocks, offering a diversification benefit. If U.S. stocks are declining, international stocks may be doing well, and vice versa.
VEA is Vanguard’s broad index fund for Developed Markets. Its mutual fund equivalent is VTMGX. VWO is the one for Emerging Markets. Its mutual fund equivalent is VEMAX. Thus VXUS (mutual fund equivalent VTIAX) is roughly 75/25 VEA/VWO. So for a realistic example where the portfolio has home country bias (most people do), a 100% equities portfolio of 80% VTI (total U.S. stock market) and 20% VXUS unfortunately only has about 5% exposure to Emerging Markets.
To remedy this, we have to forego the use of VXUS and use its components VEA and VWO to get more granular. I personally choose to equally weight Developed Markets and Emerging Markets in international stocks in my own portfolio to take advantage of this superior diversification and greater expected returns while still including the many countries in Developed Markets that may outperform the U.S. during certain periods.
Does this mean investors should use Emerging Markets for their entire ex-US stocks position? Probably not. Again, we wouldn’t want to miss out on all the developed countries around the world. That said, it shows we can probably reliably expect a greater diversification benefit and higher returns over the long term by giving a little more weight to Emerging Markets. I keep it pretty simple and just give equal weight to Developed Markets and Emerging Markets, i.e. a 1:1 ratio instead of VXUS’s 3:1.
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