Key Points
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Both developed and emerging market international stocks have beaten the S&P 500 by a wide margin over the past year.
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Their relative value and accelerating growth profiles look attractive even after their recent rally.
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International stock ETFs from Vanguard, State Street, and Schwab are among the best available for adding exposure.
After years of underperformance, international stocks have come roaring back to life. Investors have finally begun questioning how far is too far with the tech and artificial intelligence (AI) trade. With valuations high and momentum slowing, value and defensive strategies are looking more attractive.
International stocks often benefit quickly when valuations start to normalize. Historically, that has led to multiyear cycles where both developed and emerging markets outperform the S&P 500. Now that growth expectations from overseas economies are beginning to accelerate, international stocks might provide the best combination of growth and value for years to come.
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If you’re looking to get in on the international stock renaissance, here are three solid, low-cost exchange-traded funds (ETFs) that will do the job.
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1. Vanguard FTSE Developed Markets ETF
The Vanguard FTSE Developed Markets ETF (NYSEMKT: VEA) is one of the most comprehensive and cheapest ways to gain access to the international equity market. It includes nearly 4,000 stocks across Europe, Asia, and Canada. The portfolio is market cap-weighted, so investors gain exposure to major companies, such as ASML Holding, Samsung, and Roche Holdings.
2. iShares MSCI Emerging Markets ETF
The iShares MSCI Emerging Markets ETF (NYSEMKT: IEMG) provides exposure to more than 2,500 large-, mid-, and small-cap stocks from emerging market countries, including China, Taiwan, South Korea, and India. It’s also market cap-weighted and its top holdings are Taiwan Semiconductor Manufacturing, Samsung, Tencent Holdings, and Alibaba.
Samsung is included in both of the ETFs mentioned so far because the FTSE indexes consider South Korea a developed market, but the MSCI indexes consider it an emerging market.
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3. Schwab International Dividend Equity ETF
If you like the Schwab U.S. Dividend Equity ETF , you’ll also like the Schwab International Dividend Equity ETF (NYSEMKT: SCHY). It uses virtually the same strategy, but covers dividend-paying stocks from both developed and emerging markets. It tilts heavily toward big, well-established companies, such as BHP Group, GSK, and Roche Holdings. It currently yields about 3.6%.
Overall, the case for international stocks is clear. The dollar is weakening and creating a tailwind for international assets. There is a lot of value built up in international stocks relative to the S&P 500. Leadership historically tends to rotate after long periods of U.S. outperformance. And, as we’ve seen in 2025 and 2026, owning international assets can provide diversification, better risk-adjusted returns, and risk mitigation relative to a U.S.-only portfolio.
Each of the three ETFs mentioned here would be ideal in filling that gap in your portfolio.
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David Dierking has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Taiwan Semiconductor Manufacturing, Tencent, and Vanguard FTSE Developed Markets ETF. The Motley Fool recommends Alibaba Group, BHP Group, and GSK. The Motley Fool has a disclosure policy.