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The Latest Developments in International Index Funds

What was once a sparse landscape is now overflowing with choice.

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Ten years ago, investors who wanted to buy an index fund that invested outside the United States had a fairly simple decision to make. There were only four main contenders providing broad geographical exposure.

 Fidelity Spartan International Index (FSIIX) and  Vanguard Developed Markets Index (VDMIX)--like quasi-index fund  Vanguard Tax-Managed International (VTMGX)--tracked the MSCI EAFE Index.  Schwab International Index (SWISX) added a twist. Instead of tracking the MSCI EAFE Index, it owned the 350 biggest companies outside the United States, which gave it a slightly different portfolio, though the differences were not dramatic. Meanwhile,  Vanguard Total International Stock Index (VGTSX) added an emerging-markets component to the standard EAFE portfolio.

Gregg Wolper does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.