The advantages are starting to pile up for index funds and exchange-traded funds. First, there’s the cost advantage: Traditional index funds and exchange-traded funds that simply track a market benchmark rather than attempting to beat it tend to be much less expensive than their actively managed counterparts. That translates into a performance advantage, too, as low costs are highly correlated with an investment product being able to beat its peer group. Equity index funds and ETFs tend to be more tax-efficient than active funds, too. But just as there are worthwhile active funds, there are also index funds that aren’t so great. Some ETFs and index funds are saddled with high costs; others have narrow, gimmicky focuses or track overly concentrated indexes. Morningstar’s Foreign. Index Funds pick list includes top-rated passive funds from our foreign fund categories.
Foreign Index Funds
Name
|
Ticker
|
Morningstar Category
|
Morningstar Analyst Rating
|
|---|---|---|---|
| Calvert International Responsible Idx I | CDHIX | Foreign Large Blend | |
| Cbgdfbwh® Xrwbgksngyhqw Pxfns | BLMMN | Foreign Large Blend | |
| Nsdtcvj Dqvfh NncvfxBjqy® Vqzk Jq KFKN | LXZW | Foreign Large Blend | |
| Pxbgwjwc Crphmdvdhbc Zrl Tclb (ycFK) V | BKCH | Foreign Large Value | |
| Nqdmqyz DZZK YTLK Gyd Mbgr rq-FZ WDX | FQT | Foreign Large Value | |
| yMcmsls Zrtd CGHJ CVKT CH | XYPB | Foreign Large Blend | |
| nYshrfg Vthb SHKP Cbwkdj ZHLFQ | KDZK | Europe Stock | |
| gCqwkcg Nymz VDHP Srjhg Lttc Zxx ZLR | FSNN | Foreign Large Blend | |
| hWpplth Kjsfwlhk Fydwxq RRZF BNYK YC | NHTM | Foreign Large Blend | |
| qMyhpfc WPB Qrgzd XTVB PLKP WF | LFVZ | Foreign Large Blend | |
| lGjvvlj Bgxtywtdzrzln Mrmkcn Hrlmpj SHYR | BWTB | Foreign Large Blend | |
| rSkmxld MPWZ NLJR Vlxlfh QZFY | RVB | Foreign Large Growth | |
| tRzshcy GKKC XMPX Qbgt Dfv Fqsjy | NZCKX | Foreign Large Blend | |
| nFkdwjs NFJZ ZTTL Bml Mcm Vnzctl NF | FBZT | Foreign Large Blend | |
| vWgcctm MWDK ZPLH Vdbxp-Bcp CSCSQ | PMH | Foreign Small/Mid Blend | |
| zNfgktj HYKC WTHH Kfpmx WS | JZX | Foreign Large Value | |
| rVkbjjb FCQQ Pdpp Yqvdcdxj Yhcfvb ZJC | BYQB | Foreign Large Growth | |
| tCqjgwj WDQT Rpht Drhmfcx Hpggyw VTJ | PSGJ | Foreign Large Blend | |
| Ctgmcy Ktbpyvxnhpj Cdnh Sk Dk PKV | HKYQ | Foreign Large Value | |
| Zvbwdd Kmtpdcfcrflsr Mvfpndlb Hrzhhf G | FVLM | Foreign Large Value | |
| Tzlsfy Qnzkkyvwlkprk Cfgtbj QH | MXDY | Foreign Large Blend | |
| Zymzxs Xmmgxmwrwldtr Jsbktl | WBWZC | Foreign Large Blend | |
| Kcwdmn Xrwphnpvjdzfv Cvfhz-Byb Tv NPS™™ | SPDV | Foreign Small/Mid Blend | |
| QWXH® GNRW XMXH FsjsvvlptKpyrjfx YGD | GQKS | Foreign Large Blend | |
| QNQC® Qsynvczkh Mwfzbvyvr Tdl ft-ML NVKD | NFLW | Foreign Large Blend | |
| CWDM® Zmdbtyhvg Lyzjnjtwp Nfy lf-PN SYT | VVZS | Foreign Large Blend | |
| Jtnmdqdn Jkxqmqwcj Frxdvyt Rpmff Rhncpvvx | DMXQT | Foreign Large Blend | |
| Lbbfrqwk CBD Jwjmbvnqvwvpz Shmbv SLZSC | RRPK | Foreign Large Blend | |
| Tvvzfpbt ZNDK Hkj-Ngf wv-ZW GTVR | CMS | Foreign Large Blend | |
| Mtqkzfrx KJZY Snq-Crp lj-LF FxKm Svr Ng | RZFCB | Foreign Small/Mid Blend | |
| Jgbtqyhr Mxhn Cfb Rlsjst JP | KYJH | Foreign Large Growth | |
| Sdmhyzgd Wjvy Rc Vvm Jrj Cxh RVXC | VZJJ | Foreign Large Value |
List Criteria
International Equity Funds
For this list, we included all of the major international (non-U.S.) fund categories. This includes diversified foreign funds that invest in large companies and smaller companies across the globe; diversified emerging-markets funds; funds focused on China, India, Japan, as well as more diversified Pacific- Asia funds; and Europe- and Latin America- focused funds. (Note that funds from some of these categories may not appear in the list depending on the other criteria required.)
Medalist Funds (Gold, Silver, or Bronze)
The Analyst Rating for Funds is based on our fund analysts’ conviction in a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.
Index Funds
Index funds track a particular index, like the S&P 500, and attempt to match its returns by holding the same stocks that are in the index in the same proportion. Index funds are considered “passive” because they only hold what is in the index (or a representative sampling), and only change their portfolios when the index changes. Most indexes reflect or represent an entire market, region, sector, or style, and hence most index funds are intended to offer investors identical exposure to those markets. An index fund’s performance should match the performance of the index minus the expenses associated with running the fund, which are typically low.
No-Load Funds
This list includes only no-load funds. “No load” refers to a mutual fund that does not charge a fee (known as a load) for buying or selling its shares; the investor typically buys no-load funds directly from a fund company or through a fund supermarket. Load funds, on the other hand, are sold by an advisor or broker and charge a percentage fee at purchase or sale of the shares, which is meant to be compensation for the planner’s investment-selection advice. (Note: Not all advisors sell load funds. Many are compensated via a flat fee or a percentage of all assets under management.) Whether a fund charges a load or not isn’t a reflection of its underlying quality. Many load funds are also Medalists, and some load funds are available without a load through 401(k) or other retirement plans. But we’re including only no-load funds here, since this list is designed to help investors who are primarily doing their own fund-picking.
Distinct Portfolios Only
Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. Screening for “distinct portfolios only” removes all but one of these options to avoid having several share classes of the same offering cluttering the list. Morningstar normally designates the oldest share class as the distinct portfolio. In some cases, this share class may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. In those cases, investors may want to consider an “investor” share class of the same fund, though the fund expenses may be higher for those share classes.