Diversification is the name of the game when it comes to building a robust investment portfolio. In an ever-changing market landscape, international exchange-traded funds (ETFs) offer a simple yet powerful means to infuse geographical diversification into your investment strategy.
The Unpredictable Dance of Global Stocks
As the world of international stocks dances to its own rhythm, it remains largely uncorrelated to the fluctuations of US stocks. The intricate choreography of global markets makes it nearly impossible to predict when stocks in different countries will rise or fall. Hence, the importance of embracing geographic diversification as a cornerstone of your investment approach.
Charting a Path to Global Prosperity
In this article, we’ll embark on a journey to uncover some of the most compelling international ETFs that could potentially complement your investment portfolio. Please note that this article serves as a reference and does not constitute investment advice. It’s crucial to recognize that investing in these ETFs carries inherent risks, and financial guidance from a professional advisor tailored to your unique circumstances is advisable.
For those eager to expand their investment horizons beyond domestic borders, our curated list of top-performing international ETFs could prove invaluable. Remember, the world of investments is ever-evolving, and these ETFs are subject to market dynamics. With that said, let’s dive into our selection of promising international ETFs that may pique your interest.
Vanguard Total International Stock ETF (VXUS) offers simplicity and broad exposure. Known for its low-cost investment offerings, Vanguard presents VXUS as a stellar option with a rock-bottom expense ratio of 0.07%. This ETF tracks the FTSE Global All Cap ex US Index, encompassing developed and emerging markets beyond US borders, delivering a comprehensive slice of international stock markets. VXUS has an annual dividend yield of 2.46%, with returns of -7.92% over the past year, 8.43% over three years, and 9.86% over five years.
iShares Core MSCI Total International Stock ETF (IXUS) draws from the illustrious MSCI ACWI ex USA Investable Market Index. Sporting an identical expense ratio of 0.07% and a wealth of thousands of holdings, this ETF mirrors VXUS in many respects. IXUS boasts an annual dividend yield of 2.11%, with returns of -8.10% over the past year, 7.77% over three years, and 9.26% over five years.
iShares Core MSCI EAFE ETF (IEFA):
IEFA mirrors VEA in its focus on developed markets outside the US. With an appealing 0.07% expense ratio, it caters to buy-and-hold enthusiasts. Bolstered by around 3,000 holdings, IEFA promises well-rounded diversification.
Vanguard FTSE Developed Markets ETF (VEA):
Seeking exposure to developed markets? VEA, with its low 0.05% expense ratio, hones in on regions like Japan, Australia, and Western Europe. While not as diversified as VXUS, VEA serves as a robust choice for those targeting specific developed international markets.
Embrace the Global Dance
As the global financial stage continues to evolve, it’s prudent to consider the role of international ETFs in your investment choreography. These offerings provide an accessible avenue to partake in the diverse rhythms of international markets, potentially enriching your portfolio’s performance.
While these ETFs showcase promising statistics, remember that past performance is not a guarantee of future results. The world of investments is marked by uncertainty, and a well-balanced approach that aligns with your individual goals and risk tolerance is key. If you’re ready to embark on a journey of global prosperity, these international ETFs could be your ticket to the captivating dance of international markets.
Vanguard FTSE Emerging Markets ETF (VWO):
Diving into emerging markets, VWO tracks the FTSE Custom Emerging Markets All Cap China A Inclusion Index. Despite a slightly higher 0.08% expense ratio, VWO offers the potential for greater diversification benefits, complementing your investment strategy.
SPDR Portfolio Developed World ex-US ETF (SPDW):
Leaning into the developed world’s potential, SPDW zeroes in on countries beyond the US and emerging markets. With an ultra-low expense ratio of 0.04%, SPDW presents a diverse selection of thousands of growth and value stocks, making it a compelling addition to your investment arsenal.
Vanguard Total World Stock ETF (VT):
Venturing into both developed and emerging markets, VT tracks the FTSE Global All Cap Index. An enticing choice for long-term investors, VT provides extensive geographic diversification, though with a tilt towards large-cap stocks.
iShares Core MSCI International Developed Markets ETF (IDEV):
IDEV sets its sights on developed nations outside the US, encompassing approximately 2,000 holdings across countries like Japan, Canada, and the UK. Boasting an enviable expense ratio of just 0.04%, IDEV emerges as a cost-effective option for investors seeking global exposure.
Navigating the World of Multiple International ETFs
Holding a diversified international portfolio demands a keen eye for ETF specifics. The inclusion or exclusion of countries like Canada and the classification of South Korea as either developed or emerging can make a world of difference. To strike a balanced chord, aligning with a single issuer, such as Vanguard’s VEA and VWO combo, can help avoid imbalances and uncertainties.
Schwab Fundamental International Large Co. Index ETF (FNDF):
Tracking the Russell RAFI Developed ex-U.S. Large Company Index, FNDF hones in on large-cap enterprises, excluding small and mid-caps. Comprising around 1,000 holdings predominantly in Japan and the UK, FNDF carves a unique path. However, with an expense ratio of 0.25%, it’s essential to weigh its potential against the cost.
A Global Perspective:
A well-rounded investment mix often encompasses global ventures. When it comes to tapping into worldwide markets, ETFs shine as the budget-friendly go-to. Delve into our lineup of choices, rich with options to suit your portfolio’s needs.
Considerations for Your Investment Journey
In this realm of global investing, your risk appetite and strategic approach steer the ship. The array of funds showcased here stands as robust choices for those embracing a steadfast, long-term investment ethos. As you chart your course, may these international ETFs help pave the way to your financial horizon.
