DLEUX as a replacement for VXUS? Over DLEUX's lifetime (Dec 23, 2016 to present), VTIAX's total return has been 24.31%, while DLEUX has returned 23.69%. Not a big difference one way or the other.
(Remarkably, it is still possible to coax this data out of M*.)
DLEUX gets its equity exposure from swaps. This frees up its cash to invest 100% of the NAV in bonds. So for every dollar you invest, the fund's got about $2 of exposure to securities.
As the prospectus states: " Fund’s total investment exposure (direct investments in debt securities plus notional exposure to the Index) will typically be equal to approximately 200% of the Fund’s net asset value."
Having less diversification can sometimes be ignored, e.g. S&P 600 vs. Russell 2000. Sometimes it's desired (concentrated portfolios). But here, the change would not be merely greater concentration, but a big change in focus.
DLEUX's index covers primarily large/mid cap European companies. This switch would get rid of all exposure to small caps and to emerging markets and even to all the developed countries outside of Europe, including Japan, S. Korea, Israel, HK, Taiwan, Australia, NZ, and Canada.
To put it another way, only 40% of VTIAX/VXUS is invested in developed Europe. You'd be jettisoning the other 60% of the world. I've owned a European fund, so I'm not averse to it. I'm just pointing out that, for several reasons, this change would be more than just switching one international fund for another.
Do it because large European companies are where you want to put your money (and because you want some leverage), not because DSENX has done well.
