Are you considering an international ETF for your portfolio? Indeed, 2019 turned out to be the second-best year on record for ETFs. In this period, exchange-traded funds inflows exceeded $326 billion. However, 2020 was a different year as the stock market started to experience challenges due to COVID-19. As the stock markets plunged, investors faced volatility not seen since the financial crisis. Even blue chip stocks got affected, albeit for a short time.
When I started investing, it was in the early 2000s. I didn’t know the difference between Mutual Funds or an index-fund. But, I do recall buying stocks like Netscape and Yahoo, and watching them skyrocket, only to fall shortly after. Indeed, it was not unlike the meme stock craze we see today. Actually, for me, it was a good lesson in diversification.
There isn’t one thing that defines what makes the best international ETF. Some investors look for yield while others look for growth. Some speculate, and others take a buy and hold approach. Also, not all ETFs are alike. For example, some are passively managed, while others are actively managed. And some are even leveraged ETFs! In the end, picking investments is about the investor’s goals and risk tolerance level.
This article will go over the best International ETFs investors can consider adding simple yet reliable diversification to their portfolio.
What Are ETFs?
Today, DIY investors looking to invest their money experience a dizzying array of options. Indeed, investors can buy individual stocks, options, futures, or even CFDs. But the best way to get portfolio diversification is through an index or International ETF.
In general, ETF’s are funds that get passively managed and hold a collection or a basket of stocks. Actively managed ETFs are rare and have a higher fee. Either way, you can buy ETFs from your adviser or in your brokerage account.
Index ETFs are generally known as “Low-Cost Index Funds.” The most common index funds in the United States are from Vanguard, Fidelity, and Schwab. These Index ETFs typically track an index such as the S&P 500, the Dow Jones Industrial, or the Nasdaq. Further, index funds usually hold stocks of each company on the index. So, instead…