3 One-Stop Foreign Index Funds
These total foreign market index funds from Fidelity offer great diversification and carry low fees.
Daniel Sotiroff: Investors that use index funds for their foreign stock allocation can simplify their portfolio by holding a total foreign market index fund. These are some of the broadest and most diversified foreign stock funds available because they invest in a wide selection of stocks across both developed and emerging markets.
Surprisingly, not many of these funds exist. The best known funds are Vanguard Total International Stock Market ETF and iShares Core MSCI Total International Stock ETF. But Fidelity also offers three low-cost alternatives.
The first and most comprehensive is Fidelity Total International Index fund. It tracks the MSCI All Country World Ex USA Investable Market Index and costs only 6 basis points per year. It not only spans developed and emerging markets but covers large-, mid-, and small-cap stocks, making it the broadest of the three.
The second alternative, Fidelity Global ex-U.S. Index Fund, tracks the MSCI All Country World ex USA Index. It cost slightly less, at 5 1/2 basis points, but only focuses on large- and mid-cap stocks.
Fidelity Zero International Index is the third option and is only available to investors with a Fidelity account. It tracks a benchmark of large- and mid-cap stocks and is the cheapest option as it charges no annual fee.
All three of these well-diversified funds charge low fees and are worth considering. As an added bonus--Fidelity does not charge investors on its platform to trade these funds.
Daniel Sotiroff does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.