The attraction of global markets has intensified in the ever-changing finance landscape, pushing investors to look for opportunities outside of their home countries. Strategic investing is the key to navigating this complex global financial landscape, and Exchange-Traded Funds (ETFs) have become indispensable tools for investors seeking to diversify their holdings. This article explores the top 12 ETF Funds for Cross-Border Investing, explains why investing in ETFs is appealing, suggests how to choose these funds wisely, and offers a long-term wealth-building investment plan.
With the help of our carefully curated list of the top 12 Exchange-Traded Funds (ETFs), discover the world of international investing. Find a variety of options for global exposure, ranging from cutting-edge AI-themed funds to well-known S&P 500 trackers. Learn about fund overviews, the reasons behind each investment’s best choice, and strategic considerations for building global wealth to optimize your portfolio. Read more such articles on Vantage Vista Blog.
Increasing variety:The ability of exchange-traded funds (ETFs) to diversify across different asset classes and geographical regions is one of its main draws. Purchasing a single ETF exposes investors to a variety of securities, distributing risk and reducing the effect of market volatility on their holdings.
Portfolio Management: ETFs provide an effective means of maintaining a balanced portfolio without requiring a lot of work or active management. With the help of these funds, investors can manage their portfolios passively and diversifiedly by having them track particular indices.
Minimum Fees: ETFs usually have lower expense ratios than traditional mutual funds. Because of their fee-free management structure, exchange-traded funds (ETFs) are a popular choice for investors who want to maximize returns without giving up a sizable portion of their profits to fees.
Price and Liquidity: ETFs, which are traded on stock exchanges just like individual stocks, give investors the freedom to purchase or sell shares at market prices at any time during the trading day. Because of this liquidity, investors can effortlessly take on or abandon positions, giving them a degree of control consistent with their investment objectives.
The Best Way to Choose an ETF Fund:
Trading Volume: Look for ETFs that have a high enough trading volume. Greater liquidity is usually indicated by higher trading volume, which lowers the possibility of large price swings and guarantees convenience when purchasing or selling shares.
Performance History: Analyze an ETF’s past results by looking at its track record in a range of market conditions. Robust and steady performance may be a sign of a well-run fund.
Number of Holdings: To effectively spread risk, an ETF that is well-diversified should hold a range of assets. Examine an ETF’s holdings to make sure the amount of assets matches your investing goals and risk tolerance.
Industry Diversification: Seek for exchange-traded funds (ETFs) that offer exposure to various industries and sectors. In addition to improving diversification, a well-balanced industry representation can shield your portfolio from risks unique to a given industry.
Ratio of Expense:Pay attention to the expense ratio, which shows the percentage of the fund’s assets that is allocated to management expenses each year. Long-term returns for investors are higher when expense ratios are lower.
List of Top 12 ETF Funds for Cross-Border Investing:
SPDR S&P 500 ETF (SPY):
ETF Fund Overview: SPY tracks the S&P 500 Index, offering investors exposure to the 500 largest U.S. companies.
Why it is a Best Pick: Widely recognized and efficient, SPY provides a diverse foundation for a U.S.-centric portfolio with its emphasis on large-cap stocks.
Assets under management: $350 billion
ETF price: $420.75
Expense ratio: 0.09%
Number of holdings: 505
5-year average annual return: 14.2%
Dividend yield: 1.3%
Vanguard Total International Stock ETF (VXUS):
ETF Fund Overview: VXUS provides global equity exposure by tracking the FTSE Global All Cap ex US Index.
Why it is a Best Pick: With holdings in developed and emerging markets, VXUS ensures comprehensive international diversification, making it an ideal choice for a well-rounded global portfolio.
Assets under management: $28 billion
ETF price: $59.82
Expense ratio: 0.08%
Number of holdings: 7,600
5-year average annual return: 9.8%
Dividend yield: 2.1%
Invesco QQQ Trust (QQQ):
ETF Fund Overview: QQQ mirrors the Nasdaq-100 Index, emphasizing technology and innovation.
Why it is a Best Pick: QQQ is a top pick for those seeking exposure to leading tech companies, making it an attractive choice for growth-oriented investors.
Assets under management: $200 billion
ETF price: $343.50
Expense ratio: 0.20%
Number of holdings: 103
5-year average annual return: 18.5%
Dividend yield: 0.5%
iShares MSCI EAFE ETF (EFA):
ETF Fund Overview: EFA focuses on developed markets outside the U.S. and Canada, tracking the MSCI EAFE Index.
Why it is a Best Pick: Offering exposure to Europe, Australasia, and the Far East, EFA is a well-rounded option for investors seeking international diversification beyond the U.S.
Assets under management: $60 billion
ETF price: $74.12
Expense ratio: 0.31%
Number of holdings: 900
5-year average annual return: 10.4%
Dividend yield: 2.2%
Schwab U.S. Broad Market ETF (SCHB):
ETF Fund Overview: SCHB tracks the Dow Jones U.S. Broad Stock Market Index, providing broad exposure to U.S. stocks.
Why it is a Best Pick: With a low expense ratio and a diverse portfolio of 2,500 holdings, SCHB is a cost-effective and comprehensive choice for U.S. market exposure.
Assets under management: $35 billion
ETF price: $113.80
Expense ratio: 0.03%
Number of holdings: 2,500
5-year average annual return: 14.8%
Dividend yield: 1.7%
iShares Russell 2000 ETF (IWM):
ETF Fund Overview: IWM mirrors the Russell 2000 Index, focusing on small-cap U.S. stocks.
Why it is a Best Pick: IWM is an excellent choice for investors seeking potential growth in smaller companies within the U.S. market.
Assets under management: $60 billion
ETF price: $225.40
Expense ratio: 0.19%
Number of holdings: 2,000
5-year average annual return: 16.1%
Dividend yield: 1.1%
Global X Robotics & Artificial Intelligence ETF (BOTZ):
ETF Fund Overview: BOTZ concentrates on robotics and AI-related companies, tracking the Indxx Global Robotics & Artificial Intelligence Thematic Index.
Why it is a Best Pick: BOTZ taps into the transformative trends of robotics and AI, making it an innovative choice for investors eyeing the technology sector.
Assets under management: $4 billion
ETF price: $31.95
Expense ratio: 0.68%
Number of holdings: 30
5-year average annual return: 22.3%
Dividend yield: 1.2%
iShares MSCI Emerging Markets ETF (EEM):
ETF Fund Overview: EEM provides exposure to emerging market equities by tracking the MSCI Emerging Markets Index.
Why it is a Best Pick: EEM is a top pick for investors seeking high-growth opportunities in emerging markets, offering diversification beyond developed economies.
Assets under management: $55 billion
ETF price: $54.20
Expense ratio: 0.68%
Number of holdings: 1,400
5-year average annual return: 12.7%
Dividend yield: 2.5%
Health Care Select Sector SPDR Fund (XLV):
ETF Fund Overview: XLV focuses on the healthcare sector, mirroring the Health Care Select Sector Index.
Why it is a Best Pick: XLV is a defensive sector fund with long-term growth potential, making it a solid choice for investors looking for stability and exposure to healthcare.
Assets under management: $30 billion
ETF price: $125.60
Expense ratio: 0.12%
Number of holdings: 65
5-year average annual return: 16.9%
Dividend yield: 1.9%
iShares U.S. Real Estate ETF (IYR):
ETF Fund Overview: IYR tracks the U.S. real estate sector by following the Dow Jones U.S. Real Estate Index.
Why it is a Best Pick: IYR provides exposure to real estate for income and diversification, making it a suitable choice for investors seeking yield and stability.
Assets under management: $5 billion
ETF price: $107.25
Expense ratio: 0.41%
Number of holdings: 100
5-year average annual return: 8.3%
Dividend yield: 3.7%
Financial Select Sector SPDR Fund (XLF):
ETF Fund Overview: XLF focuses on the financial sector, mirroring the Financial Select Sector Index.
Why it is a Best Pick: XLF is a strategic pick for those anticipating growth in the financial industry, offering exposure to major U.S. financial companies.
WisdomTree U.S. SmallCap Dividend Fund (DES):
Assets under management: $35 billion
ETF price: $42.90
Expense ratio: 0.12%
Number of holdings: 60
5-year average annual return: 15.2%
Dividend yield: 2.1%
WisdomTree U.S. SmallCap Dividend Fund (DES):
ETF Fund Overview: DES tracks the performance of small-cap dividend-paying U.S. stocks.
Why it is a Best Pick: DES blends income and potential for small-cap growth, making it an attractive option for investors seeking dividends and capital appreciation in the small-cap space.
Assets under management: $3 billion
ETF price: $40.15
Expense ratio: 0.38%
Number of holdings: 700
5-year average annual return: 14.5%
Dividend yield: 3.4%
Long-Term Wealth Creation Investment Strategy:
Allocating funds should take into account your investment horizon, financial objectives, and risk tolerance. Diversify your holdings across a range of asset classes. Stability of the portfolio can be improved by having a well-balanced mix of fixed income, equities, and alternative assets.
Past Performance: An in-depth examination of an ETF’s past performance can reveal insights into its resilience under different market circumstances, even though past performance does not guarantee future results.
Periodic Review of Investments: Make sure your investment portfolio is in line with your financial objectives by reviewing it on a regular basis. To keep your holdings at the appropriate asset allocation, periodically rebalance them.
Invest More Money or Leave: Keep an eye out for shifting market conditions. To take advantage of new opportunities or get out of underperforming funds that don’t fit your investing strategy, think about adding new ETFs to your portfolio.
Think About the Long Run: Keep an eye on the big picture. Avoid the urge to act rashly in response to transient changes in the market. Taking a more measured approach frequently results in larger wealth creation.
Top 12 ETF Funds for Cross-Border Investing Conclusion:
Foreign investment presents a plethora of opportunities for individuals looking to assemble a stable and varied portfolio. Investors who want to get into the global market can start with the top 12 ETF funds that are described in this article. Recall that the reasons why exchange-traded funds (ETFs) are appealing are their capacity to provide liquidity, minimal fees, efficient portfolio management, and diversification. Investors can start down the path to wealth creation by choosing funds carefully and implementing a long-term investing strategy. The expert advice offered can help you navigate the challenging world of cross-border investing and make wise decisions, regardless of your level of experience.
Top 12 ETF Funds for Cross-Border Investing FAQs:
You must open a brokerage account in order to make ETF investments. Similar to individual stocks, you can purchase and sell ETF shares through the brokerage platform once your account is set up. When selecting a brokerage, take into account elements like trading fees, research tools, and customer support.
Think about your time horizon, risk tolerance, and investing goals. Consider elements like the ETF’s holdings, expense ratio, investment strategy, and historical performance. Comprising a variety of asset classes and industries can also help create a well-balanced portfolio.
Generally speaking, ETFs have cheaper expense ratios than mutual funds; however, investors must be mindful of brokerage costs. Commissions for the purchase and sale of shares may be among these. Furthermore, some ETFs might incur additional expenses like bid-ask spread or tracking error, which could affect returns.
Exit tactics differ according to personal financial objectives. While some investors might favor a more active trading strategy, others might take a long-term approach, holding ETFs for a longer amount of time. When choosing an exit strategy, take into account the state of the market, your investing goals, and any potential tax ramifications.
Speaking with a financial advisor can yield insightful information that is customized to your unique financial circumstances, even though it is not required. An advisor can assist you in navigating the market’s complexities, selecting appropriate ETFs, and developing a customized investment plan that is in line with your objectives
Examine an ETF’s past results by examining its annual returns over various time frames. But past performance does not guarantee future success. Take into account additional elements such as the fund’s holdings, investment strategy, and tracking performance against the benchmark index
The difference between an ETF’s performance and that of its benchmark index is measured by tracking error. A lower tracking error means the ETF tracks its index closely. Evaluating tracking error is crucial because increased divergence can affect the results of your investments and cause variations in returns.
ETFs can, in fact, be appropriate for long-term investors. They are appealing for creating a long-term, well-balanced portfolio because of their low expense ratios and benefits from diversification. Compounding returns are frequently advantageous to long-term investors, who also possess the adaptability to withstand transient market swings.
Review your ETF investments on a regular basis; however, the frequency will depend on your goals and investment horizon. While some investors perform reviews on a quarterly or annual basis, others might do so more regularly. Evaluate your financial status, the state of the market, and whether your portfolio is in line with your goals.
Yes, because they are liquid and can be bought and sold at any time during the trading day, exchange-traded funds (ETFs) are frequently used for short-term trading. Investors should, however, exercise caution when it comes to transaction costs and take into account how short-term capital gains taxes may affect their overall returns.