International stocks offer some diversification and minimize geographic risk, but holding on to a bunch of domestic and international stocks can be overwhelming. It’s difficult enough to monitor domestic stocks, but international stocks add more complexity. Adding these stocks to your portfolio means you’ll have to monitor the governments and data points from those corporations’ respective countries.
Luckily, there is a much easier way to get exposure to corporations that operate abroad. International ETFs give investors exposure to a basket of international stocks. You can find international ETFs that align with your long-term goals and offer yields, but some of these ETFs are better than others. These are some of the top international ETFs to consider.
iShares International Select Dividend ETF (IDV)
The iShares International Select Dividend ETF (BATS:IDV | IDV Price Prediction) has enjoyed a strong 26% year-to-date rally, while most U.S. benchmarks are flat or barely up for the year. The fund has a 0.49% expense ratio and spreads its $5.3 billion in total assets across 101 holdings.
The strong year-to-date performance is an outlier for the fund because it’s more known for its high yield. The fund’s 5.48% yield draws in a lot of investors, and none of its positions make up more than 5% of the fund’s total assets. That means IDV’s performance doesn’t lean too heavily toward a single stock. Only three stocks make up more than 3% of the fund’s total assets.
The fund has almost no tech stocks and pools more than 30% of its capital into financial services stocks. Utilities is the second largest sector and makes up about 15% of IDV’s total assets.
iShares MSCI Canada ETF (EWC)
The iShares MSCI Canada ETF (NYSEARCA:EWC) is filled with Canadian stocks that are mostly large-caps and mid-caps. The fund has a 0.50% expense ratio and has delivered an annualized 15.2% return over the past five years. Financial services and energy are the two largest sectors that make up more than half of the fund’s total assets.
Investors get exposure to 83 stocks, with the top 10 picks making up 41% of the fund’s total assets. Bank stocks are heavily represented in the fund’s top 10 stocks. A strong focus on banks has helped the fund command a 1.80% SEC yield.
Tariff concerns helped EWC post strong gains to start the year. Investors who are worried about tariffs or uncertainty returning to U.S. markets may want to park some of their money into a fund like EWC that offers exposure to Canadian stocks.
Vanguard European Stock Index Fund ETF (VGK)
The Vanguard European Stock Index Fund ETF (NYSEARCA:VGK) uses the FTSE as a benchmark, which is similar to the S&P 500. The passively managed fund invests in companies throughout Europe while having a respectable 0.06% expense ratio.
VGK is up by more than 20% year-to-date, which has contributed to the fund’s annualized 12.6% return over the past five years. A common theme among international ETFs is the lack of focus on tech stocks, and that trend continues with VGK. Tech stocks only make up 8.2% of the fund’s assets, which is very different from benchmarks like the S&P 500 and Nasdaq Composite. FTSE prioritizes financial services stocks, as they make up more than 20% of its total assets.
FTSE has more than 1,000 holdings, with its top 10 stocks making up less than 20% of its total assets. Most of the stocks in this fund are giants within their respective industries. The average market cap of FTSE stocks is $50.8 billion.
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