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Many foreign markets have growth potential and unique diversification for your portfolio. To this end, international ETFs provide you with instant exposure to some of the most promising foreign companies for that growth.
Read on to know which international ETFs are the best bets right now.
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International ETFs Biggest Gainers and Losers
The biggest gainers and losers lists of international ETFs can give you insight into this sector. Published daily, the lists include the last price and the percentage of change of each fund. The order and entrants on these lists can change from day to day.
Investor sentiment plays a big role. If investors fear a recession, they usually favor defensive funds over international ETFs.
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Xtrackers MSCI EAFE High Dividend Yield Equity ETF
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WisdomTree International LargeCap Dividend Fund
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WisdomTree International High Dividend Fund
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SPDR MSCI EAFE StrategicFactors ETF
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iShares Inc iShares MSCI Israel ETF
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Vanguard FTSE Emerging Markets ETF
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Goldman Sachs ActiveBeta Emerging Markets Equity ETF
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First Trust Dorsey Wright International Focus 5 ETF
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Vanguard FTSE All-Wld ex-US SmCp Idx ETF
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SPDR S&P International SmallCap ETF
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Invesco International BuyBack Achievers ETF
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Schwab International Small-Cap Equity ETF
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iShares MSCI Canada Index Fund
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Knowledge Leaders Developed World ETF
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Invesco DWA Developed Markets Momentum ETF
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WisdomTree International Hedged Quality Dividend Growth Fund
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iShares MSCI EAFE Small-Cap ETF
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Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF
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WisdomTree International SmallCap Fund
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Xtrackers MSCI EAFE Hedged Equity ETF
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Schwab Fundamental International Small Company Index ETF
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First Trust Developed Markets Ex-US AlphaDEX Fund
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iShares MSCI Intl Small-Cap Multifactor ETF
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FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund
Premarket International ETFs
If you have a bright trade idea at 6 a.m., you don’t need to wait for the opening bell to make your trade. Premarket trading is available with most online brokers. Also, the tempo of premarket trading can be an indication of how the trading day will go.
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Schwab International Equity ETF
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Invesco S&P International Developed Low Volatility ETF
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Schwab Fundamental International Large Company Index ETF
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iShares MSCI EAFE ETF
Aftermarket International ETFs
Due to very low trade volume, you may have trouble trading your ETFs or mutual funds at the price you intended. But it’s nice to know you can act on late news or a sudden shift in your holdings.
Why Invest in International ETFs?
International ETFs can deliver a unique type of diversification to your portfolio that U.S. ETFs can’t. Also, your portfolio could benefit from other defensive qualities these funds have. Let’s explore them.
Diversification: International ETFs can track non-U.S. indexes that cover by country, region, sector or niches. This gives you several ways to channel your portfolio’s diversification. Also, most international EFT holdings are not directly tied to the U.S. economy. This means the foreign companies’ stock prices and U.S. stock prices can travel opposite of each other.
You get paid: The lifetime average S&P 500 dividend yield is approximately 2%. On the other hand, the lifetime dividend yield average of Vanguard FTSE Developed Markets ETF (VEA) is 3.38%. This leading international ETF can pay you a dividend that is 1.38 % more than most U.S.-based ETFs.
The hedging effect: International ETFs can offset negative U.S.-specific economic events such as government shutdowns and tax hikes.
3 International ETF(s) by AUM
Here’s Benzinga’s list of the best international ETFs to invest in now. We ranked these funds according to assets under management (AUM). Increasing AUM is the main objective of most ETFs. So, it makes a good standard for evaluating these international ETFs.
1. Vanguard FTSE Developed Markets ETF (NYSEARCA: VEA):
VEA attempts to track the performance of a diversified group of companies in Canada, Europe and the Pacific Region. It has an AUM of $60.6 billion and a very low expense ratio (ER) of 0.05%. This fund has 1,850 holdings — the most prominent ones are SK Telecom (NYSE: SKM), Takeda Pharmaceutical (NYSE: TAK) and Toyota Motor Co (NYSE: TM).
VEA allocates 90% of its portfolio to European and Pacific regions. However, the fund’s 10 largest holdings only account for 10.3% of its assets. This strategy apparently works — VEA has a 10-year annual rate of return (ARR) of 5.75%. Due to recent events, this fund’s stock took a nosedive. But it’s showing signs of recovery.
Vanguard FTSE Developed Markets ETF (ARCA:VEA)
2. iShares Core MSCI EAFE ETF (BATS: IEFA):
With $59 billion under management, IEFA attempts to match the performance of stocks of a market-weighted index of developed market stocks in Europe, the Far East and Australia. IEFA has more liquid funds than most ETFs in this space. Plus, it has a low expense ratio (ER) of 0.07%.
A few of this firm’s major holdings are Toyota Motor Co (NYSE: TM). Novartis AG (NYSE: NVS) and AstraZeneca (NYSE: AZN). The United Kingdom, Japan and France represent 50% of the fund’s asset allocation. Over the last 2 months, current world events negatively impacted this fund’s stock price.
3. Vanguard FTSE Emerging Markets ETF (NYSEARCA: VWO):
Consistent with its name, VWO tries to mimic the FTSE Emerging Markets All Cap China A Inclusion Index. About 58% of VMO stocks are from emerging markets in Asia, Brazil and South Africa. Obviously, this fund attracts investors with its high potential for growth. However, high potential equals high risk in any economics class. This is why Vanguard targets long-term minded investors for this ETF.
To date, VWO has $51.12 billion AUM with an ER of 0.10%. This ETF has 28% of its assets committed to its top 10 holdings. Some of its big-name stocks are Alibaba Holding (NYSE: BABA), JD.com (NASDAQ: JD) and China Mobile (NYSE: CHL). VWO has a 10-year ARR of 3.03%. Its stock mirrors the same pattern as VXUS and VEA.
Vanguard FTSE Emerging Markets ETF (ARCA:VWO)
Best Online Brokers for International ETFs
Even with the risk-reducing advantages of ETFs, investing in international ETFs requires a fair amount of due diligence. You must stay abreast of market changes and accurate tracking devices. Online brokers provide the resources you will need to successfully navigate this market sector.
TradeStation makes it easy for you to begin trading international ETFs. It offers $0 commission ETF trading and effortless onboarding. If you are a novice, you’ll find the web platform very accomodating. It has interactive charts, streaming market news, 1-step trading, trade alerts and other tracking tools.
TradeStation’s Easy Language makes algorithmic trading accessible to the average trader. It gives you the ability to create, test and execute automated trading strategies. This broker also provides loads of historical data for you to optimize your investment ideas.
With over 2,200 ETFs, this online broker offers you more $0 ETF trading opportunities than any other broker. This includes offerings from Vanguard, Wisdom Tree and ProShares. You can use streaming market news from Benzinga and Morningstar to map out your trading day. Firstrade specifically caters to its global investors. It has a large number of international ETFs that track markets by regions, countries or sectors.
Firstrade’s Quick Bar makes trading convenient by allowing you to make a trade anywhere on its platform. No matter where you go on the site, the collapsible Quick Bar stays at the bottom of your screen. This online broker offers trading platforms for every investing style. All are user-friendly with customizable charts and indicators. Also, you can take advantage of Firstrade’s extended-hours trading.
3. TD Ameritrade
Charles Schwab (NYSE: SCHW) recently announced its purchase of TD Ameritrade. This union will give you TD Ameritrade’s superior platforms and tools on Charles Schwab’s website within the next 3 years. TD Ameritrade uses cutting-edge technology to make your trading activities go smoothly and efficiently. It uses its decades in the industry to provide you the best in platforms, trading tools, research and education. Plus, it offers commission-free ETF trading.
Recently, TD Ameritrade made more international markets and sectors available on its 24/5 extended-hours trading schedule. This means you can trade international ETFs any time of the day and night, Monday through Friday.
For active traders, the thinkorswim platform delivers high-quality support. All of the data and charting tools are optimal. This platform helps you trade internationally with economic indicators from around the world. Plus, you’ll have access to over 400,000 data points from the Federal Reserve.
Your Future and International ETFs
International ETFs can be a good addition to your portfolio. While giving your investment portfolio unique diversification, these funds give you broad, low-cost exposure to emerging foreign markets. Plus, the better-than-average dividend yield serves as motivation to hold international ETFs for the long term.