You Max the 401(k), Own the House, and Still Have Cash Piling Up. These 3 ETFs Are the Next Account

You did everything correct. The 401(k) is maxed, the mortgage is on autopilot, and the emergency fund is boring and full. Now your checking account is doing that awkward thing where cash just keeps stacking up with nowhere to go. A taxable brokerage is the obvious next account, and three ETFs deserve first consideration for those dollars: the Vanguard Total International Stock ETF (NASDAQ:VXUS), the Avantis U.S. Small Cap Value ETF (NYSEARCA:AVUV), and the Schwab International Dividend Equity ETF (NYSEARCA:SCHY). Each one fills a hole your workplace plan almost certainly leaves open.

Here is the setup. Most 401(k) menus lean heavily on U.S. large-cap index funds, with maybe a target-date fund wrapping the rest. That is fine, but it means your retirement engine is running on one cylinder, namely American mega-caps. The taxable account is where you fix that, and you do not need twenty tickers to do it.

VXUS: The International Piece Your 401(k) Skips

VXUS holds thousands of stocks outside the United States, from European industrials to Japanese exporters to emerging-market financials. Vanguard runs it at a 0.05% expense ratio, which means roughly $995 of every $1,000 you invest is actually working for you rather than paying the fund company.

The fund is up 15.92% year to date and 25.38% over the past year through August 19, with a 10-year return of 146.84%. It also pays a quarterly distribution, with a trailing 12-month total of $2.1884 per share. If your 401(k) is 90% U.S. equity, one purchase of VXUS instantly rebalances your global exposure.

AVUV: A Small-Cap Value Tilt You Cannot Get in a Target-Date Fund

Academic research has spent decades documenting that small-cap value stocks tend to outperform the broad market over long stretches. The catch is that almost no 401(k) menu offers a clean way to own them. AVUV, run by Avantis, is the vehicle most professional allocators use for that exposure, with roughly $27.1 billion in net assets as of May 31.

The portfolio holds hundreds of smaller American companies screened for value and profitability. Recent holdings include names like Five Below, Avnet, GATX, CarMax, and Cabot Corp, spread across financials, industrials, consumer discretionary, energy, and healthcare. Returns have been strong, with the fund up 24.79% year to date, 34.58% over the past year, and 89.64% over five years. This is your growth-tilted swing at a long-term premium the S&P 500 alone does not capture.

SCHY: International Dividend Income With a Quality Screen

SCHY takes a different angle on international investing. Instead of owning everything abroad, it screens for higher-quality dividend payers in developed and emerging markets, and it charges very little to do so. As of May 31, its net assets stood at about $2.27 billion, with top positions in BHP Group, Eni, TotalEnergies, Allianz, Deutsche Post, British American Tobacco, Roche, GSK, and Unilever.

The fund distributes quarterly. Its trailing 12-month payout is $1.1083 per share, with a forward annualized figure of $1.4284. At a recent price of $33.49, that puts real cash in your brokerage account four times a year, from companies you would probably never buy individually. Total return has been solid, up 23.07% over the past year and 54.99% over five years.

Trade-Offs You Should Consider

None of these picks is risk-free. International stocks have lagged U.S. large caps for long stretches, and there is no guarantee 2026 marks a permanent regime change. Small-cap value goes through brutal drawdowns; expect a bumpy ride in AVUV during any recession scare. And SCHY’s foreign dividends come with currency swings and foreign withholding tax that can cut into your effective yield, especially in a taxable account where the foreign tax credit paperwork lands on you.

Even so, if your surplus cash is looking for a job and your 401(k) is already all-American large caps, these three ETFs cover the diversification, growth tilt, and income exposure that account is missing. That is what a taxable brokerage is for.

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