Zachary Evens notes that the year has already been quite eventful, but international stocks have stood out, achieving some impressive returns recently.
It’s tough to predict which specific international markets or stocks will perform best in the future. That’s why a good strategy is to diversify across numerous countries and a wide array of stocks. This approach can yield rewards if foreign stocks continue their upward trend, while also minimizing potential losses if certain nations face downturns.
Here are three well-diversified international stock ETFs worth considering for long-term investment through 2025.
Three Top International ETFs for 2025 and Beyond
- Vanguard Total International Stock ETF VXUS
- iShares Core MSCI EAFA ETF IEFA
- Vanguard International High Dividend ETF VYMI
The first option is the Vanguard Total International Stock ETF, trading under the ticker VXUS. It boasts high ratings, praised for its extensive diversification and straightforward structure. Plus, it’s cost-effective, charging just 5 basis points annually.
This ETF encompasses over 8,000 stocks, weighted by market capitalization. Major foreign stocks, like Taiwan Semiconductor and Tencent, attract a larger share of investments, but no single company typically exceeds 2% of its holdings.
What sets the Vanguard Total International Stock ETF apart is its 20% allocation to emerging markets. This inclusion adds a layer of diversification that not all ETFs can offer, potentially benefiting investors if emerging market stocks perform well.
Next up is the highly rated iShares Core MSCI EAFA ETF, with ticker IEFA. While not as broad as VXUS, it still holds more than 2,500 stocks. It’s another affordable way to invest in foreign markets, with a fee of only 7 basis points.
This ETF features stocks from various sizes across 21 developed markets. Although it doesn’t include assets like Taiwan’s semiconductors or Tencent due to its exclusion of emerging markets, it does invest in large multinationals like SAP and Nestlé.
None of its stocks dominate the portfolio, as each is capped at 1.5%, preventing overexposure to any single company. Additionally, the sector allocations align with general market norms, ensuring a balanced approach.
Lastly, the Vanguard International High Dividend ETF is ideal for those who prioritize income, trading under the ticker VYMI. It has an annual fee of 17 basis points and has earned recognition for balancing yield and risk effectively.
While high yields can sometimes mask underlying declines, careful market-cap weighting mitigates such risks. Focusing on prominent dividend payers adds quality, historically leading to rewarding returns and lower volatility compared to recent benchmarks in the category.
Diversification is another key aspect, as this ETF typically holds over 1,500 foreign stocks, with no more than 15% allocated to its top 10 holdings.
For further insights, take a look at the three noteworthy small ETFs for 2025.
