Best ETFs for Non-US Stocks: Your Ultimate Guide

Investing in international stocks can be an exciting way to diversify your portfolio and tap into global growth opportunities. However, navigating the world of non-US stocks can be daunting. That's where Exchange Traded Funds (ETFs) come in. These funds allow investors to gain exposure to a broad range of international markets with ease. In this article, we'll explore the best ETFs for non-US stocks, helping you make informed decisions for your investment strategy.

Understanding Non-US Stock ETFs

ETFs are investment funds that trade on stock exchanges, much like individual stocks. They are designed to track the performance of a particular index, sector, or asset class. Non-US stock ETFs specifically focus on stocks from countries outside of the United States. This can include emerging markets, developed markets, or specific sectors such as technology or healthcare.

Top 5 Non-US Stock ETFs

1. Vanguard MSCI Emerging Markets ETF (VWO)

   • Description: This ETF offers exposure to a diversified portfolio of emerging market stocks, including countries like China, India, and Brazil.
   • Benefits: Low expense ratio, broad diversification, and exposure to high-growth markets.




2. iShares MSCI EAFE ETF (EFA)

   • Description: This ETF tracks the performance of developed markets outside of the United States, known as the EAFE (Europe, Australia, and Far East) region.
   • Benefits: Access to major international markets, lower volatility compared to emerging markets, and a well-diversified portfolio.

3. SPDR MSCI ACWI ex-U.S. ETF (ACWX)

   • Description: This ETF provides exposure to a broad range of global stocks, excluding the United States.
   • Benefits: High diversification, exposure to both developed and emerging markets, and a lower expense ratio.

4. iShares MSCI ACWI ex-U.S. ETF (ACWX)

   • Description: This ETF provides exposure to a broad range of global stocks, excluding the United States.
   • Benefits: High diversification, exposure to both developed and emerging markets, and a lower expense ratio.

5. BlackRock Global Opportunities Fund (MGO)

   • Description: This actively managed ETF seeks to capitalize on global investment opportunities across various sectors and countries.
   • Benefits: Actively managed for potential outperformance, diversified investment strategy, and access to global markets.

Case Study: Investing in the Vanguard MSCI Emerging Markets ETF (VWO)

Let's say you're considering adding emerging market exposure to your portfolio. After researching various options, you decide on the Vanguard MSCI Emerging Markets ETF (VWO). This ETF has a low expense ratio of 0.07%, which means you'll pay less in fees for your investment. By investing in VWO, you gain access to a diversified portfolio of emerging market stocks, allowing you to benefit from the potential growth of these economies.

Over the past five years, VWO has provided a return of approximately 7.5% per year, compared to the S&P 500's return of around 5.5% during the same period. This demonstrates the potential for higher returns in emerging markets.

Conclusion

Investing in non-US stocks can be a valuable addition to your portfolio, offering diversification and the potential for higher returns. By choosing the right ETF, you can gain access to international markets with ease. The top 5 ETFs listed in this article are excellent choices for investors looking to invest in non-US stocks. Be sure to conduct your own research and consult with a financial advisor before making any investment decisions.