In today’s global economy, diversifying your investment portfolio with international mutual funds and ETFs (Exchange-Traded Funds) is a strategic way to mitigate risk and enhance potential returns. By investing across various countries and regions, you can tap into growth opportunities that may not be available in your home market. Below are three practical examples of international mutual funds and ETFs that demonstrate how you can achieve this diversification.
This fund is designed for investors looking to gain exposure to international stocks, excluding those in the United States. The Vanguard FTSE All-World ex-US Index Fund seeks to track the performance of the FTSE All-World ex-US Index, which includes large-, mid-, and small-cap stocks from developed and emerging markets.
By investing in VFWAX, investors can benefit from the potential growth of economies outside the U.S., thus diversifying their portfolios. It’s particularly useful for those who want a low-cost option with broad exposure to international markets.
The iShares MSCI Emerging Markets ETF is an excellent choice for investors looking to capture growth in developing markets. This ETF aims to reflect the performance of the MSCI Emerging Markets Index, which includes stocks from 26 emerging market countries such as China, India, and Brazil.
Investing in EEM allows investors to gain exposure to rapidly growing economies and sectors that may not be represented in their domestic portfolios. This ETF is particularly appealing to those willing to accept higher volatility in exchange for the potential for higher returns.
The Franklin LibertyQ Global Equity ETF provides investors with diversified exposure to global equities while emphasizing quality factors such as low volatility, high quality, and value. This ETF seeks to track the LibertyQ Global Equity Index, which includes companies across various sectors and regions.
This fund is ideal for investors who want a balanced approach to international investing, focusing not just on geographical diversification but also on selecting high-quality stocks to mitigate risk. The combination of factors helps to create a more resilient portfolio.