Several big asset managers — including BlackRock, Fidelity and Schwab — expect international stocks to outperform U.S. stocks over the next several years, Morningstar personal finance director Christine Benz reported earlier this month.
What's an investor to do?
Those who would prefer not to pick individual stocks but instead own a basket of non-U.S. ones can look to a handful of exchange-traded funds that provide broad-based exposure to international stocks, Morningstar investment specialist Susan Dziubinski wrote in a blog post this week.
ETFs can pursue different strategies when they invest internationally, according to Dziubinski. She listed eight top-notch ones that earn a Morningstar medalist rating of gold with 100% analyst coverage.
Six of the best international ETFs land in one of Morningstar’s large-cap foreign stock categories. These focus on Europe, and specifically on established markets in France, Germany, Switzerland, the Netherlands, Spain, Italy and the United Kingdom. They often also hold significant positions in Asia.
Some of these dabble in emerging market stocks, but tend to limit their exposure to about 15% of assets.
Other ETF investing strategies focus on foreign small- or mid-cap stocks, which often carry higher emerging market positions. Still other ETFs may invest exclusively in emerging market stocks or particular regions.
See the gallery for the eight best international stock ETFs, according to Morningstar. One-year performance is as of Jan. 21.
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