What is the best international ETF?
International investing can be an effective way to diversify your equity holdings. While returns have lagged behind US markets, international ETFs provide diversification benefits as they tend to be less correlated to US equities.
International investing can be an effective way to diversify your equity holdings. While returns have lagged behind US markets, international ETFs provide diversification benefits as they tend to be less correlated to US equities.
The largest Global Ex-US ETF is the Vanguard Total International Stock ETF VXUS with $64.00B in assets. In the last trailing year, the best-performing Global Ex-US ETF was AADR at 15.51%. The most recent ETF launched in the Global Ex-US space was the SP Funds S&P World ex-US ETF SPWO on 12/20/23.
Also, Buffett seemed to express his opinion in his 2013 letter to Berkshire Hathaway shareholders. In that letter, he wrote that he had instructed in his will that most of the fortune inherited by his family be invested in a low-cost S&P 500 index fund. He added, "I suggest Vanguard's."
Our pick for the best overall Vanguard ETF is Vanguard Total World Stock ETF. For a 0.07% expense ratio, Vanguard Total World Stock ETF offers a globally diversified exposure across over 9,500 stocks.
Dividend-paying international stocks can be a solid way to diversify a portfolio while achieving dividend yields in excess of 5%. The iShares International Select Dividend ETF (IDV) is one of the largest ETFs in this category with $4.6 billion in assets under management and a 5.7% dividend yield.
International ETFs can provide advisors a simple way to diversify client portfolios and expose them to potential long-term growth opportunities overseas.
Vanguard International Growth Fund seeks long-term capital appreciation through broadly diversified exposure to the major equity markets outside the United States.
VXUS - Performance Comparison. In the year-to-date period, VEA achieves a -0.29% return, which is significantly higher than VXUS's -0.41% return. Over the past 10 years, VEA has outperformed VXUS with an annualized return of 4.60%, while VXUS has yielded a comparatively lower 4.17% annualized return.
Foreign large-growth and foreign large-value funds fill more specialized roles; we consider them “building blocks” that could make up as much as 15% to 40% of a portfolio's assets. Because of the higher risk inherent in emerging markets or region-specific funds, we recommend limiting them to 15% of assets or less.
Is it safe to invest in international funds?
Investing in international funds allows you to benefit from the growth in multiple economies and earn better returns. It also helps you diversify your investments while boosting the quality of your portfolio.
The 90/10 strategy calls for allocating 90% of your investment capital to low-cost S&P 500 index funds and the remaining 10% to short-term government bonds. Warren Buffett described the strategy in a 2013 letter to his company's shareholders.
Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.
The largest Active Management ETF is the JPMorgan Equity Premium Income ETF JEPI with $31.82B in assets. In the last trailing year, the best-performing Active Management ETF was NVDL at 410.13%. The most recent ETF launched in the Active Management space was the Eaton Vance Floating-Rate ETF EVLN on 02/08/24.
The Vanguard fund has a lower price-to-earnings ratio, at 17.4 times, compared with 18.3 for iShares. This is due to the lower weighting to the highly rated US market. Fees are comparable, with iShares costing 0.2% and Vanguard costing 0.22%.
If you want to actively trade within your accounts, Fidelity might be the better option. However, if you want to focus more on index investing, or you want to use a robo-advisor, Vanguard has a slight edge.
Currency ETFs
ETFs structured as open-end funds, also known as '40 Act funds, are taxed up to the 23.8% long-term rate or the 40.8% short-term rate when sold.
Buffett Explains
"We think diversification is — as practiced generally — makes very little sense for anyone that knows what they're doing. Diversification is a protection against ignorance..."
There are direct and indirect routes available for ETFs. You can purchase US ETFs directly via a domestic or international broker or purchase an Indian ETF of international indices.
VXUS is likely most appealing to long-term buy-and-holders, but could also potentially be useful as a short-term “risk on” play or as part of a long/short pairs trade. Other options for similar exposure include VEU and ACWX.
What is the largest international ETF?
The largest International ETF is the Vanguard FTSE Developed Markets ETF VEA with $122.62B in assets. In the last trailing year, the best-performing International ETF was GBTC at 246.21%. The most recent ETF launched in the International space was the Eaton Vance Floating-Rate ETF EVLN on 02/08/24.
International investing can be an effective way to diversify your equity holdings. While returns have lagged behind US markets, international ETFs provide diversification benefits as they tend to be less correlated to US equities.
Diversify your portfolio by buying stocks, ETFs, and mutual funds with exposure to foreign markets. Trade on U.S. and international exchanges in a single account.
VXUS has a dividend yield of 3.32% and paid $1.88 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Dec 18, 2023.
Investments in the fund are appropriate for those seeking long term growth. VXUS is subject to equity market risk and currency fluctuation risk from investments in foreign stocks. When VXUS declines in value, we'll automatically sell it and buy the alternate as part of our tax-loss harvesting strategy.
