Why should I invest in international ETFs?

International diversification reduces portfolio risk by spreading investments across different economies, currencies, and political systems. International markets do not always move in sync with US stocks, so holding both can smooth overall returns. Additionally, international markets often trade at lower valuations, potentially offering better forward returns.

What is the difference between VXUS and VEA?

VXUS includes both developed and emerging market stocks for complete non-US coverage. VEA focuses only on developed markets like Europe, Japan, and Australia. VXUS is simpler as a single international holding, while VEA gives you more control if you want to size your emerging market allocation separately.

Do international ETFs pay higher dividends?

Yes, international equities generally offer higher dividend yields than US stocks due to different corporate payout cultures and lower valuations. International ETFs often yield 2.5-3.5%, compared to about 1.5% for the S&P 500.

How does currency affect international ETF returns?

When the US dollar strengthens, international ETF returns are reduced for US investors because foreign currencies buy fewer dollars. When the dollar weakens, international returns get a boost. Over long periods, currency effects tend to wash out, but they can be significant in any given year.

Best ETFs/Best International ETFs for 2026

Best International ETFs for 2026

International ETFs provide exposure to equity markets outside the United States, offering geographic diversification that can smooth portfolio returns and capture growth opportunities in regions with different economic cycles. With US stocks having outperformed international markets for over a decade, many investors are underweight foreign equities, but history shows that leadership rotates and international diversification remains a core principle of sound portfolio construction.

VXUS from Vanguard offers the broadest international exposure, holding over 8,000 stocks from both developed and emerging markets worldwide. VEA, also from Vanguard, focuses specifically on developed international markets like Europe, Japan, and Australia, excluding emerging markets for a more conservative international tilt. IEFA from iShares provides similar developed-market exposure with slightly different index methodology and strong liquidity that appeals to institutional investors.

When investing internationally, currency movements can significantly impact returns. A strengthening US dollar hurts international ETF returns for US-based investors, while a weakening dollar provides a tailwind. Some investors choose currency-hedged versions of international ETFs to eliminate this variable, though hedging adds cost. Additionally, international markets often trade at lower valuations than US stocks, which can represent either value opportunities or fundamental differences in corporate quality and growth prospects.

How We Rank

ETFs are ranked by assets under management (AUM). Only ETFs with $50M+ in assets are included. Data is updated daily.

#	Symbol	Fund Name	Expense Ratio	AUM	YTD	Div Yield	Holdings
1	VXUS	Vanguard Total International Stock ETF	0.05%	$582.30B	+11.65%	3.04%	8,602
2	VEA	Vanguard FTSE Developed Markets ETF	0.03%	$282.20B	+12.01%	3.05%	3,873
3	IEFA	iShares Core MSCI EAFE ETF	0.07%	$181.85B	+7.89%	3.44%	2,621
4	IEMG	iShares Core MSCI Emerging Markets ETF	0.09%	$159.11B	+19.68%	2.58%	2,661
5	VWO	Vanguard FTSE Emerging Markets ETF	0.06%	$146.30B	+10.47%	2.72%	5,942
6	BNDX	Vanguard Total International Bond ETF	0.07%	$116.90B	-1.06%	4.41%	426
7	QQQM	Invesco NASDAQ 100 ETF	0.15%	$87.36B	+15.11%	0.50%	103
8	VEU	Vanguard FTSE All-World ex-US ETF	0.04%	$83.90B	+11.62%	2.95%	3,823
9	VT	Vanguard Total World Stock ETF	0.06%	$79.20B	+9.42%	1.80%	9,773
10	EFA	iShares MSCI EAFE ETF	0.32%	$75.97B	+7.40%	3.28%	692
11	BSV	Vanguard Short-Term Bond ETF	0.03%	$69.80B	-1.07%	3.88%	30
12	SCHF	Schwab International Equity ETF	0.03%	$64.96B	+12.52%	3.24%	1,497
13	IXUS	iShares Core MSCI Total International Stock ETF	0.07%	$57.35B	+11.79%	3.10%	4,158
14	BIV	Vanguard Intermediate-Term Bond ETF	0.03%	$51.80B	-1.66%	4.05%	298
15	VTEB	Vanguard Tax-Exempt Bond ETF	0.03%	$44.40B	-0.34%	3.31%	2
16	SPDW	State Street SPDR Portfolio Developed World ex-US ETF	0.03%	$40.15B	+12.14%	3.13%	2,440
17	ACWI	iShares MSCI ACWI ETF	0.32%	$31.88B	+9.30%	1.54%	2,275
18	EFV	iShares MSCI EAFE Value ETF	0.31%	$29.89B	+9.34%	3.98%	407
19	EEM	iShares MSCI Emerging Markets ETF	0.72%	$29.67B	+20.31%	2.08%	1,226
20	IDEV	iShares Core MSCI International Developed Markets ETF	0.04%	$29.54B	+8.10%	3.28%	2,255
21	AVEM	Avantis Emerging Markets Equity ETF	0.33%	$24.76B	+20.90%	2.28%	3,639
22	FNDF	Schwab Fundamental International Large Company Index ETF	0.25%	$23.74B	+17.12%	3.16%	907
23	EMXC	iShares MSCI Emerging Markets ex China ETF	0.25%	$23.55B	+29.61%	2.53%	644
24	DFIV	Dimensional - International Value ETF	0.27%	$19.45B	+11.00%	2.77%	557
25	AVDV	Avantis International Small Cap Value ETF	0.36%	$19.22B	+16.56%	2.80%	1,436

What to Look For

Decide whether you want developed markets only, emerging markets only, or a blend of both. Developed market ETFs like VEA are less volatile, while emerging market inclusion adds growth potential and risk. Expense ratios range from 0.05% to 0.15% for major international ETFs, which is remarkably low for global diversification.

Check the country and sector weightings, as some international ETFs are heavily concentrated in Japan, the UK, or specific sectors like financials. Consider whether you want currency-hedged exposure, and evaluate the dividend yield, which tends to be higher for international equities than US stocks.

Which International ETFs Is Best for You?

VXUS is the most comprehensive international ETF, covering both developed and emerging markets in a single fund. With over 8,000 holdings across more than 40 countries, it provides maximum diversification at a low 0.07% expense ratio. For investors who want simple, complete international coverage, VXUS is the one-stop solution.

VEA is the best choice for investors who prefer to separate their developed and emerging market allocations. By focusing on developed markets like Europe, Japan, Canada, and Australia, VEA provides more stable international exposure. Many investors pair VEA with a dedicated emerging market ETF to control the allocation mix precisely.

IEFA covers developed international markets similarly to VEA but tracks a different index and has slightly different country weightings. Its excellent liquidity makes it popular with institutional investors and active allocators. IEFA and VEA are largely interchangeable for most purposes, with the choice often depending on brokerage preferences.

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