Top 10 Global ETFs for international exposure: Diversify your portfolio worldwide
Global ETFs (Exchange-Traded Funds) have emerged as a powerful tool for achieving this international exposure, offering access to markets worldwide through a single investment vehicle. The below mentioned ETFs track a variety of global indices, sectors, and asset classes, providing investors with an efficient way to tap into international growth and mitigate risks associated with a single market.
The appeal of global ETFs lies in their ability to offer diversification, liquidity, and cost efficiency, making them a preferred choice for both novice and seasoned investors. In this article, we will explore the top 10 global ETFs for international exposure, analyzing their performance, underlying assets, and why they stand out in the crowded ETF marketplace. Whether you are looking to hedge against domestic market volatility or seek growth opportunities abroad, these ETFs offer a compelling case for inclusion in your investment portfolio.
1. Vanguard Total International Stock ETF (VXUS)
The Vanguard Total International Stock ETF (VXUS) is the most suitable investment tool for those who desire to diversify by spreading globally. This ETF traces the FTSE Global All Cap ex U.S. Index, which also includes big, medium, and small-cap stocks from markets other than the USA in both, developed countries and emerging ones.
Why It Stands Out:
VXUS allows investors to take part in almost 7,000 different types of stock from over 40 countries, so it is one of the most attractive global ETFs for international exposure. Its low cost at 0.07% and wide differentiation make it possible for investors to cut costs while accessing global markets with a broad range of stocks.
2. iShares MSCI ACWI ex U.S. ETF (ACWX)
The iShares MSCI ACWI ex U.S. ETF (ACWX) is a fund that allows you to have a piece of the entire world stock market, excluding the United States. The fund follows the MSCI ACWI ex USA Index, which reflects the developed and emerging markets sector.
Why It Stands Out:
ACWX is one of the top-performing international ETFs, and it prioritizes a high level of diversification and geographic distribution in various sectors and regions. The expense ratio of 0.32% compares favorably to others. Besides, the fund provides investors with access to over 2,000 stocks in the index.
3. SPDR Portfolio Developed World ex-US ETF (SPDW)
The SPDR Portfolio Developed World Ex-US ETF (SPDW) is centered on stocks from developed markets outside of the United States, including Europe, Japan, and Canada. It follows the S&P Developed Ex-U.S. BMI Index.
Why It Stands Out:
SPDW is a very good option for investors with the low expense ratio of 0.04% who want to invest in developed markets. Its wide range of over 2,200 stocks makes it one of the best global ETFs for international exposure.
4. iShares Core MSCI Emerging Markets ETF (IEMG)
The iShares Core MSCI Emerging Markets ETF (IEMG) is for investors who want a piece of the action in the developing markets. It depicts the MSCI Developing Markets Investable Market Index, which comprises large, medium-sized, and small companies of developing economies.
Why It Stands Out:
IEMG is a great idea for those who are all about emerging markets, maximizing their growth potential. It is the fact that its cost ratio is 0.09% only, besides the fact that the fund consists of over 2,400 stocks, which makes it one of the best international ETFs within the emerging markets category.
5. Schwab International Equity ETF (SCHF)
The Schwab International Equity ETF (SCHF) includes foreign large and mid-cap stocks from developed countries excluding the United States. It follows the FTSE Developed ex-US Index.
Why It Stands Out:
SCHF is popular for its low expense ratio of 0.06% which makes it a cheaper alternative to gain access to developed international markets. The ETF contains about 1,500 stocks, thus offering broad diversification.
6. Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)
Invesco FTSE RAFI Developed Markets ex-US ETF (PXF) is targeting countries that are developed and not the U.S., and it is the original methodology that picks the stocks on the fundamental factors such as book value, cash flow, and dividends.
Why It Stands Out:
PXF’s differentiator is its investment strategy, which is centered on strong foundational companies. Its expense ratio of 0.45% is high compared to many others but for those who prefer a strategy rooted in fundamentals, the company’s performance justifies the price.
7. iShares MSCI EAFE ETF (EFA)
The iShares MSCI EAFE ETF (EFA) is an asset class that grants access to the developed markets of Europe, Australasia, and the Far East. It monitors the MSCI EAFE Index, which is among the most popular global stock markets.
Why It Stands Out:
EFA is a highly liquid and well-established ETF with a large number of shares. The instrument uses the MSCI EAFE Index that includes over 900 stocks. This fund has a reasonable expense ratio of 0.32%, given its exposure to all these different components.
8. Vanguard FTSE All-World ex-US ETF (VEU)
The Vanguard FTSE All-World ex-US ETF (VEU) offers a wide range of international stocks, including but not limited to developed and emerging markets. It is the one that follows the FTSE All-World ex US Index.
Why It Stands Out:
VEU is of high-quality and suitable for international exposure which, with a lower expense ratio of 0.07%, is preferred by overseas investors. It boasts over 3,500 holdings as it is one of the most versatile international ETFs in terms of diversification.
9. Franklin FTSE Japan ETF (FLJP)
The Franklin FTSE Japan ETF (FLJP) is a pure-play ETF of Japanese equities. This ETF has as its benchmark the FTSE Japan RIC Capped Index.
Why It Stands Out:
FLJP is a unique ETF designed for investors seeking the benefits of the Japanese market. With a 0.09% expense ratio, it is a cheap way to ride the rising number of what is, one of the world’s largest economies.
10. iShares MSCI Emerging Markets Min Vol Factor ETF (EEMV)
The iShares MSCI Emerging Markets Min Vol Factor ETF (EEMV) provides a low volatility approach to emerging markets while still hedging against market fluctuations. The index it follows is the MSCI Emerging Markets Minimum Volatility.
Why It Stands Out:
EEMV is highly suitable for investors who prefer emerging markets but want to reduce the risk level. At a cost of 0.25%, the expense ratio is fair in view of its solid performance in decreasing volatility.
Conclusion
The investment in the Global ETFs is a simple and efficient way to get international exposure, diversify your portfolio, and benefit from the growth opportunities around the world. The top 10 global ETFs for international exposure featured in this article give a variety of options to cater to various investment strategies, including if you are going for broad market exposure, emerging market growth, or specific regions like Japan or developed markets outside the U.S.
As global markets continue to evolve, these ETFs provide a flexible and cost-effective way to adapt to changing economic conditions and tap into international growth. By having some of the best global ETFs in your portfolio, you can increase your diversification, reduce your risk, and be able to get the maximum out of the global market that you invest in.
