When U.S. markets dominate headlines, it’s easy to overlook the opportunities waiting outside domestic borders. But over the long haul, international stock markets spanning developed and emerging economies have historically offered diversification and exposure to growth trends that may not be as prevalent in a U.S. only portfolio. Owning international equities can help reduce correlation with U.S. large caps and capture cyclical rotations in global leadership. Research shows that broadening exposure beyond U.S. borders can potentially dampen volatility and improve risk-adjusted returns over time because global economies rarely move in perfect lockstep with the U.S. market.
For investors planning to hold forever, meaning over decades, not days, international Equity ETFs offer a cost-efficient, professionally managed way to own hundreds or even thousands of foreign stocks with a single trade. Here are five carefully selected ETFs worth considering.
- Schwab International Dividend Equity ETF (SCHY)
Expense Ratio: 0.08% (net)
Net Assets: $2.14B
Forward Dividend Yield: 3.2%+ (TTM)
Diversification & Performance: Over the past year, SCHY has delivered notable total return performance relative to its category, supported by a stable dividend component and diversified multinational holdings.
Why It’s Worth Buying:
SCHY uses a quality-tilted dividend index that screens for stability and dividend reliability among non-U.S. firms. It intentionally targets stocks with long track records of paying regular dividends, a feature often tied to resilient business models and strong free cash flow. Its holdings span across sectors such as financials, consumer staples, and healthcare industries that offer defensive qualities during market volatility. With an expense ratio well below many actively managed international funds, SCHY combines income generation with global diversification — a compelling markup for buy-and-hold investors seeking earnings and growth outside American borders.
What to Watch:
Though SCHY emphasizes dividend quality, it still carries currency and geopolitical risks inherent to foreign investing. But over extended holding periods, international diversification has historically mitigated concentration risk seen in U.S.-heavy portfolios.
- Vanguard FTSE Developed Markets ETF (VEA)
Expense Ratio: 0.03%
Net Assets: $287B
Dividend Yield: 6%
Performance Evidence: The fund’s track record includes resilience during periods when U.S. stocks lagged, thanks to heavy weighting in European and Asia-Pacific names.
Why It’s Worth Buying:
VEA is one of the largest and cheapest developed-market ETFs available, capturing equities from major economies like Japan, the U.K., Canada, and Germany. Its expansive portfolio includes thousands of stocks spanning multiple sectors from industrials and consumer goods to technology and healthcare. Because it tracks a comprehensive FTSE index, VEA provides pure broad market exposure rather than a dividend or factor tilt, making it ideal for long-term buy-and-hold investors who want to own the international economy itself, not just a slice of it.
The ultra-low expense ratio, about 0.03% means more of your returns stay invested rather than being eroded by fees. Over decades, even small differences in cost can materially affect compounded outcomes, a fact well-documented in investment cost research.
What to Watch:
VEA’s performance tends to reflect trends in developed global markets. It doesn’t include emerging equities, so if you want faster growth potential (albeit with more volatility), you’ll want to pair VEA with an emerging market ETF.
- iShares MSCI Emerging Markets ETF (IEMG)
Expense Ratio: 0.21%
Net Assets: 138.76B
Why It’s Worth Buying:
Emerging markets economies such as India, Brazil, Taiwan, and South Korea often grow faster over the long run than developed markets because they are earlier in their development cycle. IEMG offers broad exposure to more than 2,500 stocks across large, mid, and small caps from countries that may benefit from rising consumption, expanding middle classes, and structural economic reforms.
Unlike more concentrated emerging market ETFs with higher costs and narrower exposure, IEMG’s mix combines liquidity with a wide opportunity set, limiting reliance on any single country or sector. Its growth orientation can help diversify a core developed markets sleeve, making it a strong complement to funds like VEA.
Performance Perspective:
Emerging markets have historically underperformed U.S. equities in some years but have rebounded sharply when global growth expectations rise. Diversifying across both developed and emerging exposures can capture growth cycles that U.S.-only portfolios might miss.
- Vanguard FTSE Emerging Markets ETF (VWO)
Expense Ratio: 0.08%
Dividend Yield: 7%+
Net Assets:151.76B
Why It’s Worth Buying:
VWO is one of the largest and most cost-efficient emerging markets ETFs, tracking the FTSE Emerging Markets All Cap China A Inclusion Index. Its low expense ratio gives it an edge over higher-cost competitors, and its broad regional diversification includes exposure to major expanding economies like China, India, Brazil, and Southeast Asia.
The higher dividend yield also adds an income component which can be particularly attractive when combining yield with growth prospects. Although emerging equities can be volatile, their potential for long-term capital appreciation paired with dividend income makes VWO a versatile core holding.
Performance Insight:
Emerging markets often experience larger price swings than developed markets. For long-term holders, this volatility can be a source of both risk and opportunity, but broad diversification like VWO’s tends to smooth out idiosyncratic country shocks over time.
- iShares Core MSCI International Developed Markets ETF (IDEV)
Expense Ratio: 0.04%
Net Assets: $26.99B
12-Month Trailing Yield: 3.2%
Why It’s Worth Buying:
IDEV offers another compelling way to own a basket of developed international stocks with minimal cost and strong liquidity. It tracks the MSCI World ex USA Investable Market Index, covering a wide range of companies across Europe, Asia, and other advanced economies with lower operating costs.
IDEV’s slightly higher yield than some pure total market international competitors reflects its weighting toward dividend-paying stocks within developed markets, while its global footprint gives an investor exposure to both growth and value sectors.
Proven Performance:
Funds tracking broad developed market indices have shown that over full global cycles, non U.S. equities have contributed meaningfully to diversified portfolios especially during periods when the U.S. market growth cooled. Combining IDEV with a broader emerging market ETF can create diversified international exposure across risk profiles.
Why These ETFs Make Sense to Buy and Hold Forever
The ETFs above are compelling for several reasons:
- Low Ongoing Costs:Expense ratios as low as 0.03% mean that more of your money stays invested over decades rather than being eaten by fees. Funds like VEA epitomize how cost efficiencybenefits long-term returns.
- Diversified Exposure:Instead of owning a handful of foreign individual stocks (which carries unique company risk and trading hurdles), these ETFs own hundreds or thousands of equities across continents and sectors.
- Income Potential:Some, particularly SCHY and VWO, offer attractive yield profilesrelative to pure growth ETFs, adding cash flow that can be reinvested to power compounding over time.
- Resilient Long-Term Performance:Developed markets provide stability and scale, while emerging markets offer growth potential combining both smooths out shocks and broadens diversification.
How to Add These ETFs to Your Portfolio
Getting started with these international ETFs is straightforward:
- Use your brokerage account: Most major brokerages allow you to buy ETFs like stocks.
- Dollar-cost averaging (DCA): Set up recurring purchases to smooth entry points over time.
- Reinvest dividends: Many brokerages let you automatically reinvest distributions to boost compounding.
- Monitor currency effects: International ETFs fluctuate not just with stock prices but also with currency movements relative to the dollar.
We believe the information in this material is reliable, but we cannot guarantee its accuracy or completeness. The opinions, estimates, and strategies shared reflect the author’s judgment based on current market conditions and may change without notice.
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