Morningstar's 5 Favorite Foreign-Stock ETFs
These are some of our favorite exchange-traded funds for investors seeking to add or augment their portfolio's international-stock exposure.
Reasonable minds could argue that U.S. stocks' valuations are getting a bit stretched as they enter their ninth year of gains. But while the S&P 500 TR has gained nearly 14% per year and 11% for the trailing five- and three-year periods, the MSCI World Ex USA NR LCL has returned about 10.5% and 6.7%, respectively. That has led some experts to be more sanguine about the prospects of foreign stocks vis-a-vis their U.S. counterparts.
And, as discussed in this video, now may be a good time to check up on your portfolio's allocations and rebalance if needed. Many investors who have let their winners ride may find that not only has their total equity allocation has risen above their target, but the foreign-stock percentage of their equity allocation may have declined. While it's not a bad idea to trim your exposure to equities if they have become overweight, you may actually want to bump up your foreign equity holdings or add exposure to foreign stocks if you don't already have it.
Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.