Exchange-traded funds can make excellent portfolio building blocks, as they allow investors to get exposure to the parts of the market they want, and avoid what they don’t want, Morningstar content development editor Tori Brovet wrote in a recent blog post.
Brovet noted that a good place to start screening ETFs is with Morningstar’s medalist rating. ETFs that earn the top rating of Gold are those analysts consider likeliest to outperform over a full market cycle.
International stocks "certainly aren't must-owns," Brovet wrote. "From a risk-reduction standpoint, international stocks aren’t great diversification tools for a portfolio heavy in U.S. stocks. But remember that investment opportunities exist around the globe; many think it’s a mistake to limit your investments to U.S. stocks."
Indeed, DoubleLine CEO Jeffrey Gundlach and Buckingham Strategic Wealth principal Larry Swedroe are among the market experts who recommend U.S. investors buy international stocks.
In her post, Brovet listed the best international ETFs that reside in one of Morningstar’s foreign or global stock categories. All received a Gold rating with 100% analyst coverage in October.
See the gallery for the 14 best international stock ETFs to buy and hold, according to Morningstar. Year-to-date performance is as of Oct. 10.
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