10 Best International Stock Funds You Can Buy
See the Best Mutual Funds for International Investing
Smart investors know that investing in international stocks is a good idea for the best portfolio construction. With that in mind, I researched a long list of mutual funds to arrive at the 10 best international stock funds you can buy.
To make this list of international stock funds, I screened out load funds and only considered 4- and 5-star rated funds, according to the top mutual fund research and analysis firm, Morningstar, Inc. Therefore all you'll see are the best no-load international stock funds.
The list is organized by category. For example, I'll group together the index funds and will include some aggressive stock funds that invest in emerging markets or small-cap stocks. I'll also highlight a few that concentrate in a particular region, such as Europe or Asia.
So without further ado, here are the top international stock funds to buy:
Best International Stock Index Funds
Index funds can be a good way to get broad and diversified exposure to a large segment of the market at a low cost. In this case, we'll highlight index funds investing in foreign markets:
- Vanguard Total International Stock Index (VGTSX): For broad exposure to foreign stocks, both developed and emerging markets, it's tough to beat VGTSX. The fund tracks the FTSE Global All Cap ex US Index, which consists of over 6,000 non-US stocks. The expense ratio for VGTSX is a low 0.19 percent and the minimum initial investment is $3,000.
- Fidelity International Index Fund (FSIIX): This is another top notch international index fund that can provide broad and cheap exposure to foreign stocks. FSIIX tracks the MSCI EAFE index, which consists of approximately 900 non-US stocks. The expense ratio for FSIIX is a low 0.19 percent and the minimum initial investment is $2,500.
- Vanguard European Stock Index (VEURX): The only 3-star fund I allowed on the list, VEURX may be the best index fund for buying European stocks. Its rating would be higher if the short- and intermediate-term returns were higher. But when you invest in index funds, you're aiming stick close to the index, which this fund has done int the past. VEURX tracks the FTSE Developed Europe All Cap Index, which consists of over 1,200 European stocks. The expense ratio for VEURX is a low 0.26 percent and the minimum initial investment is $3,000.
Best Large-Cap Actively-Managed International Stock Funds
If you want to venture away from the reliability of index funds and take the added risk to potentially achieve higher returns, take a look at some of the best actively managed international stock funds that buy mostly large-cap foreign stocks.
- Tweedy Brown Global Value (TBGVX): This top international stock fund achieves its category beating returns by searching for good buying opportunities all around the world, mostly outside of the U.S and in large companies. This strategy makes TBGVX a foreign large value fund. Historical returns have placed the fund ahead of more than 95% of category peers. Although expense ratio is a bit expensive at 1.37 percent, the potential for outstanding returns can make the added cost worth it. The minimum initial investment is $2,500.
- Artisan International Value (ARTKX): Another foreign large value standout, ARTKX has historically beaten the category averages and the primary index for international stock, the MSCI EAFE. The fund's portfolio is focused on 43 holdings, which is a relatively small number but the experienced management team at ARTKX have done well with a lighter load of stocks to manage. The expense ratio for ARTKX is reasonable at 1.17 percent and the minimum initial investment is affordable for most investors at $1,000. As of this writing, ARTKX was closed to new investors but fund closings are often temporary (and a good sign of prudent management).
Best International Stock Funds for Emerging Markets and Aggressive Investing
For investors willing to take a higher level of risk for the possibility of higher returns, there are aggressive stock fund choices, such as those investing in emerging markets and/or small- and mid-cap stocks of non-US companies.
So with that backdrop, here are some of the best international stock funds to get more aggressive:
- Seafarer Overseas Growth & Income (SFGIX): This fund invests in emerging markets, which are generally countries and regions that are considered to be developing economies. Examples of some of the largest emerging markets include Brazil, China, Russia, and India. Although SFGIX has only been around since 2012, it's beaten over 95% of other emerging markets funds during that time frame (as of the end of 2016). The expense ratio of 1.14 percent is below average for this type of fund and the minimum initial investment is $2,500.
- T. Rowe Price Emerging Markets Stock (PRMSX): If you're looking for a highly rated emerging markets fund with a long track record of above-average performance, PRMSX is a solid choice for you. The fund's been around since 1995, which means it's weathered more than 20 years of market conditions. And the returns have mostly remained ahead of category averages. The expense ratio of 1.24 percent is below average for this type of fund and the minimum initial investment is $2,500.
- Fidelity Total Emerging Markets Fund (FTEMX): This fund invests mostly in emerging markets stocks (at least 60% of the portfolio) but also invest in emerging markets bonds. Therefore investors get a balance of stocks and bonds in a fund that has historically been an above-average The expense ratio of 1.39 percent is average for emerging markets mutual funds and the minimum initial investment is $2,500.
- Matthews Asia Emerging Asia Investor (MEASX): If you want a top rated fund that concentrates its holdings in Asia, MEASX is one of the best funds to do the job. Matthews Asia is a mutual fund company that specializes in Asian stocks, which means they have experience and knowledge of investing in countries like China, India, Singapore, Hong Kong and the Philippines. The fund's only been around since 2013 but the track record since then has been mostly stellar and the experience at Matthews Asia offers investors some assurance that long-term returns could continue to stay above average for the category. The expense ratio of 1.50% is above average for emerging markets mutual funds but the experienced management team may be worth the premium. The minimum initial investment is $2,500.
- Wasatch International Opportunities (WAIOX): If you are willing to take even more risk that the already high risk of international stocks have, you might want to consider investing in a fund like WAIOX that invests in smaller sized international companies. Investing in smaller companies can turn into high long-term returns but, as always, there are no guarantees of this. But based on history, WAIOX delivers in terms of category-beating performance. The expense ratio of 2.25 percent is high the for the category but the returns may be worth the cost. The minimum initial investment is $2,000.
- Fidelity International Small-Cap Fund (FISMX): Investors wanting to concentrate primarily on small-cap emerging markets stock should take a close look at FISMX. Like the Wasatch fund, Fidelity International Small-Cap has historically produced high returns compared to other emerging market funds. However, FISMX has a lower expense ratio (1.31%). The minimum initial investment is $2,500.
A Final Word of Caution on International Stock Funds
International stock mutual funds can have more market risk than mutual funds that invest in the U.S. International stocks can provide diversification to a portfolio but most investors are smart to keep the overall allocation percentage to somewhere between 10 and 20 percent.
The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.