Best International ETFs
Exchange-traded funds tend to be less volatile than individual stocks and provide exposure to a broad range of stocks. Exchange-traded funds offer stock investors an appealing alternative to owning individual stocks. With ETFs, investors can own an asset that trades like a stock but gives them ownership to a broad range of stocks.
Best International ETFs
There are all kinds of ETFs available. Some track major indexes such as the S&P 500 or the Nasdaq Composite; others give investors exposure to certain parts of the world such as China or emerging markets, and others focus on specific sectors such as technology or banking. In a challenging market environment like the current one, ETFs can help eliminate the risk of owning individual stock. That’s because they tend to be less volatile than individual stocks and avoid the work of investing in individual stocks. Although they’re similar in principle to mutual funds, they’re easier to buy and trade than the typical mutual fund, and they tend to have lower fees.
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Table of Contents
If you’re looking for ETFs to buy now, keep reading to the Best International ETFs.
Top seven ETFs to buy now
|ETF||TICKER||NET ASSETS||EXPENSE RATIO||DESCRIPTION|
|Vanguard 500 Index Fund||(NYSEMKT:VOO)||$753.9 billion||0.03%||Fund that tracks the S&P 500.|
|Invesco QQQ Trust||(NASDAQ:QQQ)||$164.3 billion||0.2%||Fund that tracks the Nasdaq 100.|
|Vanguard Growth Fund||(NYSEMKT:VUG)||$145.9 billion||0.04%||Invests in large-cap U.S. growth stocks.|
|Avantis Small-Cap U.S. Value ETF||(NYSEMKT:AVUV)||$3.63 billion||0.25%||Invests in a diverse group of U.S. small-cap stocks.|
|Franklin U.S. Low Volatility High Dividend Index||(NASDAQ:LVHD)||$721.6 billion||0.27%||Holds a range of low-volatility dividend stocks.|
|Vanguard Total Stock Market ETF||(NYSEMKT:VTI)||$1.17 trillion||0.03%||Holds about 4,000 U.S. stocks of all sizes.|
|iShares Core MSCI Total International Stock ETF||(NASDAQ:IXUS)||$27 billion||0.07%||Holds about 4,500 international stocks of all sizes.|
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Vanguard 500 Index Fund
Vanguard created the index fund, and, if you’re looking for an S&P 500 index fund, the Vanguard 500 Index Fund is hard to beat. It offers a dirt-cheap expense ratio of just 0.03%, meaning that investors will pay just $3 in annual fees for every $10,000 invested with the fund. With net assets of $753 billion, the Vanguard 500 Index Fund is one of the most popular ETFs, and it’s a great choice if you’re looking to invest in the broad market. Because of its history, diversification and exposure to blue chip stocks, many investors consider it one of the best ETFs to buy and hold. Although the S&P 500 could continue to be pressured in the near future, the index has a track record of delivering 9% average annual returns with dividends reinvested.
Invesco QQQ Trust
If you’re looking for exposure to big tech stocks, Invesco QQQ Trust is an excellent choice. This ETF tracks the Nasdaq 100 Index, which includes 100 of the Nasdaq’s largest non-financial companies.
The top stocks in the ETF are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN), and the ETF is affordable with an expense ratio of 0.2%. It’s also one of the best-performing ETFs over the past decade, generating a total return of 333% and easily outpacing the S&P 500 at 204%. Once the bear market ends, the Invesco QQQ Trust looks well-positioned to outperform since many of its top holdings have a track record of beating the market. Growth stocks also tend to rise faster than the overall market in the early stages of a bull market.
Vanguard Growth Fund
Growth stock investors have been licking their wounds for much of the past year. That’s because rising interest rates pressure growth stocks since they make the discount rate rise in financial models. However, if you’re tired of trying to pick a growth stock winner at a time when so few are delivering gains, you may want to invest in the Vanguard Growth Fund, which holds large-cap growth stocks and tracks the CRSP US Large-Cap Growth Index. Like the Invesco QQQ Trust and the Vanguard 500 Index, the Vanguard Growth Fund’s biggest holdings are Apple and Microsoft, although the growth fund has its own set of smaller holdings. The Vanguard Growth Fund offers a rock-bottom expense ratio of just 0.04%, making it a good deal for anyone looking for a growth stock ETF.
Avantis Small-Cap U.S Value ETF
One of the top-performing small-cap ETFs in 2022 has been the Avantis Small-Cap U.S. Value ETF. Unlike the index funds on this list, Avantis is a managed ETF, meaning a financial manager is actively deciding which stocks to own. Its biggest holdings include Dick’s Sporting Goods (NYSE:DKS), Macy’s (NYSE:M), Alcoa (NYSE:AA), and AutoNation (NYSE:AN), and no stock makes up 1% of the total value of the ETF. Small caps tend to be more volatile than the broad market since they may not be profitable or as well-capitalized as their large-cap counterparts. As a result, small caps tend to be more at risk during a downturn because they may not have the same access to capital. With an expense ratio of 0.25%, the Avantis Small-Cap U.S. Value ETF is affordable.
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Franklin U.S. Low Volatility High Dividend ETF
Dividend stocks are becoming increasingly popular in the current market, and it’s easy to see why. As stock prices fall, dividend yields rise. Dividend stocks also tend to outperform in bear markets since paying a dividend is a reflection of profitability and generally shows a company’s ability to withstand a recession. One attractive option for a dividend ETF is the Franklin U.S. Low Volatility High Dividend ETF. Its top holdings are Philip Morris (NYSE:PM), Eaton Corp. (NYSE:ETN), Seagate (NASDAQ:STX), and Emerson Electric (NYSE:EMR). Franklin offers a 2.9% yield and charges a reasonable expense ratio of 0.27%.
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Vanguard Total Stock Market ETF
Although the S&P 500 is considered a broad-market index, it only gives you exposure to 500 large-cap U.S. stocks. If you want to own all of the U.S. stocks on the stock market, the best way to do it is with a total stock market fund such as the Vanguard Total Stock Market ETF, which holds roughly 4,000 stocks, including large caps, mid caps, and small caps. Because its holdings encompass the S&P 500, its largest holdings are the same as the broad market index. Vanguard Total Stock Market ETF aims to track the CRSP US Total Stock Market Index. Like other Vanguard funds, it has a cheap expense ratio of 0.03%. The fund is also one of the biggest available, with $1.17 trillion in assets.
iShares Core MSCI Total International Stock ETF
If it’s international markets you want, the iShares Core MSCI Total International Stock ETF is a good way to go. The fund derives its holdings from an MSCI global index and then subtracts the U.S. listings. It has roughly 4,500 stocks, including large caps, mid caps, and small caps from around the world. Many of its top holdings are Chinese stocks such as Alibaba (NYSE:BABA) and Tencent (OTCMKTS:TCEHY), but Nestle (OTCMKTS:NSRGY), Roche (OTCMKTS:RHHBY), and Toyota (NYSE:TM) are also in the top 10. The fund offers an affordable expense ratio of 0.07% and a strong dividend yield of 4.1%.
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Are ETFs right for you?
Exchange-traded funds can work for almost any kind of investor regardless of your investing style or the type of stocks you’re looking to invest in. There are hundreds of ETFs available that offer exposure to a wide range of sectors, as well as different kinds of investing goals such as dividends or growth. These funds can avoid some of the risk and volatility in individual stocks at a very low cost, They’re also a good idea if there’s a sector you want to invest in but don’t know it well enough to pick individual stocks.
For most investors, it makes sense to hold at least one or two ETFs, especially if you want to eliminate some of the work in picking individual stocks. The list above offers a good start if you’re looking for some of the best ETFs to buy.
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