Strategies and ToolsMay 18, 20265 Min

Top International ETFs to Diversify Beyond the US in 2026!

Global investing often begins with a simple question, "what happens if exposure is limited to just one market?" Many portfolios tend to be over-weighted in terms of US equities because of their size, visibility, and historical performance. But market leadership has changed across regions over the years and relying on one market alone can be risky.

International ETFs are one way of gaining access to companies in different countries through a single instrument. This article examines some of the commonly referenced international ETFs, how they function, and how they may be used to support diversification efforts in 2026.

Why Look Beyond The US Market For the Best Global ETFs?

The US market has been dominant for the past few years, but that hasn't always been the case. Different markets tend to perform differently depending on economic cycles, interest rates and geopolitical developments.

Adding some international exposure may help spread risk across economies that are not primarily influenced by the US market. For example, European markets may react differently to changes in monetary policy than US markets, while emerging markets may be more affected by the cycles of commodities or domestic growth trends.

Two important pieces of data highlight the case for global diversification:

• The US now comprises approximately 65%–70% of global equity market capitalization, which means that there is still a large portion of global opportunity outside of the US.
• International equities have shown periods of relative outperformance, with non-US equities rising by about 10% in 2025 over US stocks, indicating where the benefits of diversification can be seen.

This does not mean, of course, that international markets will outperform, but it does demonstrate that global exposure can capture different sources of growth.

What Are International ETFs?

An international ETF is an Exchange-Traded Fund that invests in companies located outside of the home country where the investor may be located. Instead of picking individual stocks in different regions, the ETF puts them into a single instrument.

For example, a global ETF may follow an index of developed economies such as the UK, Japan, and Europe, and another ETF may just focus on emerging economies such as India, Brazil, or China. This structure gives the ability to gain exposure to multiple companies and multiple regions from a single location, which may make it easier to create a portfolio.

Types Of International ETFs

Not all International ETFs are the same. They vary based on geography, market type, and investment strategy.

By Market Coverage

• Developed Market ETFs: Targets economies including the UK, Japan, and Western Europe. These markets, while generally considered more established, may not grow as fast.
• Emerging Market ETFs: Countries such as India, China and Brazil. These markets may offer higher growth potential at the expense of greater volatility.
• Global (Ex-US) ETFs: Mix of developed and emerging markets, with no US stocks in the mix.

By Strategy

• Broad Market ETFs: Track large indexes across regions
• Sector-Based ETFs: Focus on industries like technology or energy globally
• Dividend ETFs: Target companies that distribute regular income

Each type serves a different purpose, depending on how diversification is being approached.

Best International ETFs To Consider In 2026

Below is a curated list of widely tracked international ETFs based on coverage, cost efficiency, and diversification potential. These are often referenced when discussing global ETF options.

1. Vanguard Total International Stock ETF (VXUS)

This ETF provides exposure to both developed and emerging markets outside the US. It tracks a broad index covering thousands of stocks.

• Covers large, mid, and small-cap companies
• Includes markets across Europe, Asia, and emerging economies
• Often used as a core international allocation

VXUS is typically considered when looking for broad-based international diversification.

2. iShares Core MSCI Total International Stock ETF (IXUS)

IXUS offers similar coverage to VXUS but tracks a slightly different index methodology.

• Exposure to over 4,000 global companies
• Includes both developed and emerging markets
• Balanced regional allocation

It may be suitable for those looking for a single ETF to provide international exposure.

3. Vanguard FTSE Developed Markets ETF (VEA)

VEA focuses only on developed markets, excluding emerging economies.

• Exposure to Europe, Japan, and Australia
• Lower volatility compared to emerging markets
• Often used to balance risk in global portfolios

This ETF may appeal to those who prefer relatively lower volatility over higher growth potential.

4. iShares MSCI Emerging Markets ETF (EEM)

EEM targets emerging economies, which can behave differently from developed markets.

• Exposure to countries like China, India, and Brazil
• Higher growth potential with increased volatility
• Sensitive to global economic and currency trends

Emerging market ETFs may add diversification, but they can also introduce sharper price movements.

5. Schwab International Equity ETF (SCHF)

SCHF provides cost-efficient exposure to developed international markets.

• Broad developed market coverage
• Lower expense ratio compared to many peers
• Includes large-cap companies across major economies

This ETF is often considered when cost efficiency is a priority.

Comparison Table: Top Global ETFs

How Top Global ETFs May Support Diversification

Diversification works by spreading exposure across assets that do not move in the same way at the same time. International ETFs may contribute to this in several ways:

• Geographic diversification: Exposure to multiple economies reduces reliance on one country.
• Currency exposure: Returns may be influenced by currency movements, which can add another layer of variation.
• Sector differences: Different regions tend to have different sector strengths. For example, Europe has stronger industrial exposure, while Asia may have higher technology representation.

That said, diversification does not eliminate risk. Global markets can still decline together during major economic events.

Risks To Consider when Investing in Best Global ETFs

While international ETFs can broaden exposure, they also introduce specific risks:

• Currency Risk: Exchange rate fluctuations can impact returns when converted back to the base currency.
• Political And Regulatory Risk: Policies and governance standards vary across countries.
• Market Volatility: Emerging markets, in particular, can experience sharper price swings.
• Economic Differences: Growth rates, inflation, and interest rate cycles differ across regions.

These factors mean returns may vary significantly across international markets.

How To Choose The Best International ETF

Selecting from the available international ETFs depends on several factors:

• Investment Objective: Whether the goal is growth, income, or stability
• Risk Tolerance: Emerging markets may introduce higher volatility
• Expense Ratio: Lower costs can improve long-term efficiency
• Index Coverage: Understanding what the ETF tracks helps align expectations
• Portfolio Fit: The ETF should complement existing holdings rather than duplicate exposure

In many cases, investors combine developed and emerging market ETFs to create a balanced allocation.

Diversify your Portfolio with the Best International ETFs

International ETFs provide a structured way to access global markets beyond the US through a single instrument. They may support diversification by spreading exposure across regions, sectors, and economic cycles, though returns remain tied to market performance and associated risks.

With access to 9+ exchanges and 30K+ assets through one account, platforms like Dealing.com make it possible to explore international ETFs across US and UK markets without requiring multiple broker relationships. Fractional investing starting from $1 allows position sizes to be adjusted based on comfort and goals, while keeping exposure aligned with long-term portfolio strategies. Investors should ensure that any platform or product is appropriate for their needs and regulatory jurisdiction.

Disclaimer: This content is for educational purposes only and does not constitute investment advice, personal recommendations, or a solicitation to buy or sell financial instruments. All investments involve risk, including potential loss of capital. Investors should consult professional financial advisors and consider their personal circumstances before making any investment decision.