3 Great International ETFs for 2026 and Beyond

Key Concepts

International ETFs: Exchange Traded Funds focused on investing in stocks outside of the domestic market.
Basis Points: A unit of measurement used in finance to describe the percentage difference in financial figures (1 basis point = 0.01%).
Dividend Yield: The percentage return on a stock’s price paid out as dividends.
Market Cap Weighting: A method of weighting stocks in an index based on their market capitalization (share price multiplied by shares outstanding).
Value Stocks: Stocks that tend to trade at a lower price relative to their fundamentals (e.g., earnings, book value).
Growth Stocks: Stocks that are expected to grow at a rate significantly above the average for the market.
Diversification: Spreading investments across different assets to reduce risk.
Footsie Global Allcap Index: A broad global stock market index encompassing companies of all sizes in both developed and emerging markets.

International Stock Market Opportunities in 2026 and Beyond

International stock markets demonstrated strong performance in 2025, with many major global indexes achieving returns exceeding 20%, and some surpassing 50%. Despite this growth, opportunities remain for international investors, driven by continued economic growth and increasing government spending worldwide. However, careful ETF selection is crucial. Investors should prioritize ETFs with low fees, broad diversification, and significant global market exposure.

ETF Selection Criteria

The video emphasizes avoiding international ETFs that are:

High Fee: ETFs with excessive expense ratios can significantly erode returns.
Highly Concentrated: Limited diversification increases risk.
Severely Limiting Global Exposure: Restricting access to a broad range of international markets hinders potential gains.

Ideal long-term ETFs are characterized by:

Broad Diversification: Holding hundreds of stocks or bonds across multiple countries.
Low Fees: Minimizing expense ratios to maximize returns.

Featured International ETFs

1. Schwab International Dividend Equity ETF (SCHY)

Ticker: SCHY
Expense Ratio: 8 basis points annually.
Index: Dow Jones International Dividend 100 Index.
Focus: Profitable companies with consistent dividend payments.
Morningstar Rating: Silver.
Diversification: Holds approximately 100 stocks from over 20 countries, with sector weights capped at 15% and individual holdings at 4%.
Category: Foreign Large Value.
Dividend Yield: Over 3%.
Key Argument: SCHY is well-suited for income-oriented investors seeking international exposure, benefiting from the performance of international value stocks. It’s positioned as the international equivalent of the popular Schwab US Dividend Equity ETF (CHD).

2. Vanguard International Dividend Appreciation ETF (VI)

Ticker: VI
Expense Ratio: 10 basis points annually.
Index: Tracks dividend payers increasing payouts for at least seven consecutive years.
Focus: Companies demonstrating consistent dividend growth, indicating profitability.
Morningstar Rating: Gold.
Diversification: Holds dividend-paying stocks from over 20 international markets, weighted by market capitalization with a 4% limit per holding.
Category: Foreign Large Growth.
Key Argument: VI’s focus on dividend growth rather than simply high payouts, combined with its market-cap weighting and low turnover, contributes to its solid long-term performance and high conviction rating. The fund’s approach is described as efficiently capturing high-quality dividend payers.

3. Vanguard Total World Stock ETF (VT)

Ticker: VT
Expense Ratio: 6 basis points annually.
Index: Footsie Global Allcap Index.
Focus: Provides exposure to nearly 10,000 stocks across more than two dozen countries, including both developed and emerging markets.
Morningstar Rating: Gold.
Diversification: Unmatched global breadth, encompassing stocks of all sizes.
Weighting: Market-cap weighted, favoring larger companies.
US Allocation: Currently over 60% allocated to US stocks.
Key Argument: VT offers the closest approximation to a “one-ticker” solution for global stock market exposure, providing exceptional diversification at a low cost. While US performance heavily influences returns, the fund’s broad diversification mitigates risk if the US market underperforms. As stated in the video, “This is as close as stock investors can get to a quote one ticker solution, making it easy and cheap to diversify around the globe.”

Risk Mitigation Through Diversification

The video stresses the importance of broad international diversification. Concentrating investments in one or two global markets can increase risk. The highlighted ETFs offer peace of mind by allowing investors to benefit from the success of multiple international markets while being somewhat shielded from the underperformance of any single market.

Long-Term Perspective

The presenter suggests that investors should be comfortable holding these three ETFs “long past 2026,” indicating a belief in their long-term viability and suitability for a buy-and-hold strategy.

Synthesis

The core message is that international stocks present ongoing opportunities for investors, but success hinges on selecting well-diversified, low-cost ETFs. SCHY, VI, and VT are presented as strong contenders, each offering a unique approach to international exposure – dividend income, dividend growth, and total market representation, respectively. The emphasis on diversification and low fees underscores the importance of a long-term, cost-effective investment strategy.