Broaden Your Investment Horizons with 9 Diversified Global Growth ETFs

Achieving a stable and well-performing investment portfolio involves strategic diversification across various geographical regions. As the outlook for U.S. growth is anticipated to taper off by the end of 2024, adopting a more defensive stance and exploring beyond the conventional large-cap tech stocks could be prudent in the coming year.

Amidst economic uncertainties, international investing emerges as a compelling strategy for diversification. While examining different sectors and asset classes is crucial, the act of distributing investments across diverse global regions contributes to the overall stability of an investment portfolio.

Navigating the intricacies of local economic trends and stock statistics can be challenging. This is where global growth exchange-traded funds (ETFs) come into play, offering investors a straightforward way to gain exposure to overseas stocks without the complexity. Here are nine well-established global growth ETFs, each boasting assets exceeding $1 billion, providing investors with a simplified avenue to international market exposure:

Vanguard FTSE Developed Markets ETF (VEA)

Assets under management: $122.7 billion

Expense ratio: 0.05%

An extensive international fund covering over 4,000 individual stocks in developed markets worldwide, excluding the United States. It includes stalwarts like Nestle, Toyota, and Shell, making it a comprehensive and cost-effective choice for global growth exposure.

Vanguard FTSE Emerging Markets ETF (VWO)

Assets under management: $74.5 billion

Expense ratio: 0.08%

Complementing VEA, this fund focuses on emerging markets, featuring nations such as China, India, Brazil, and Mexico. Despite higher risk profiles, emerging markets offer growth potential, with the ETF’s diversified list of 4,700 components providing exposure to various market segments.

Schwab Fundamental International Large Co. Index ETF (FNDF)

Assets under management: $12 billion

Expense ratio: 0.25%

Prioritizing developed markets, FNDF encompasses over 900 large-cap companies globally. With a focus on major corporations, FNDF provides a more concentrated exposure to each holding, albeit with no single position exceeding about 2.5% of the portfolio.

Schwab Fundamental Emerging Markets Large Co. Index ETF (FNDE)

Assets under management: $5.5 billion

Expense ratio: 0.39%

A sister fund to FNDF, FNDE emphasizes the largest companies in emerging markets. Offering a balanced approach to growth potential and risk mitigation, this ETF has a 30% bias toward China, providing exposure to established leaders in emerging markets.

iShares MSCI EAFE Growth ETF (EFG)

Assets under management: $10.8 billion

Expense ratio: 0.36%

This iShares fund narrows its focus to developed markets, emphasizing dynamic companies with above-average earnings growth. While industrial stocks lead the portfolio, the fund’s quantitative screening ensures consistent profit growth among its components.

Vanguard FTSE All-World ex-US Small-Cap ETF (VSS)

Assets under management: $8.7 billion

Expense ratio: 0.07%

Venturing beyond conventional choices, VSS excludes major stocks to concentrate solely on small-cap stocks outside the U.S. With an average market cap of under $2 billion per stock, this ETF targets potentially faster-growing stocks across the global market.

Xtrackers MSCI EAFE Hedged Equity ETF (DBEF)

Assets under management: $4.7 billion

Expense ratio: 0.36%

Addressing the currency dynamics of international investing, DBEF employs currency-hedged positions through foreign exchange markets. With a similar portfolio to leading developed market funds, this ETF adds a layer of risk mitigation for investors wary of currency fluctuations.

Goldman Sachs ActiveBeta International Equity ETF (GSIE)

Assets under management: $3.4 billion

Expense ratio: 0.25%

Differentiating itself from passive funds, GSIE adopts an active strategy by focusing on stocks with the best momentum and quality. With over 700 stocks concentrated in developed markets, this ETF aims to provide investors with a selection of the finest overseas stocks.

Dimensional International High Profitability ETF (DIHP)

Assets under management: $1.7 billion

Expense ratio: 0.29%

A boutique fund from Dimensional, DIHP comprises 500 holdings selected based on global corporations’ superior profit potential. With a focus on profitability, this active ETF includes industry leaders like LVMH Moet Hennessy Louis Vuitton and ASML Holding.

In the end

Incorporating these globally diverse ETFs into your investment strategy offers a simplified yet effective approach to navigating international markets and fostering growth within your portfolio.

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