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7 Best International ETFs: Powerfully Diversify Your Portfolio Globally
7 Best International ETFs: Powerfully Diversify Your Portfolio Globally
Investing in international exchange-traded funds (ETFs) is an effective way to diversify your portfolio beyond domestic markets and gain exposure to various global economies. For investors in the Philippines, international exchange-traded funds offer opportunities to access diverse asset classes and geographical regions. This article highlights seven international ETFs that can help Filipino investors diversify globally.
1. iShares MSCI Emerging Markets ETF (EEM)
The iShares MSCI Emerging Markets ETF provides exposure to a broad range of emerging market stocks, including those from countries like China, Taiwan, India, and Brazil. This ETF allows investors in the Philippines to participate in the growth potential of emerging economies, which often outpace developed markets.
2. Vanguard Total International Stock ETF (VXUS)
The Vanguard Total International Stock ETF offers broad exposure to non-U.S. stocks, covering both developed and emerging markets. With holdings in thousands of companies worldwide, VXUS provides diversification across sectors and regions, making it a core holding for investors seeking global equity exposure.
3. SPDR S&P Global Dividend ETF (WDIV)
The SPDR S&P Global Dividend ETF focuses on high-dividend-paying stocks from around the world. This exchange-traded funds includes companies with a track record of consistent dividend payments, offering investors in the Philippines an opportunity to earn income while diversifying their portfolios across international markets.
4. iShares Global REIT ETF (REET)
The iShares Global REIT ETF invests in real estate investment trusts (REITs) from various countries, providing exposure to the global real estate market. With holdings in commercial properties, residential developments, and infrastructure projects, REET offers diversification and income potential for Filipino investors seeking exposure to the global property market.
5. Invesco DB Commodity Index Tracking Fund (DBC)
The Invesco DB Commodity Index Tracking Fund tracks the performance of a diversified basket of commodities, including energy, metals, and agriculture products. Investing in DBC can help Filipino investors hedge against inflation and currency fluctuations while diversifying their portfolios with exposure to the global commodities market.
6. iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)
The iShares J.P. Morgan USD Emerging Markets Bond ETF provides exposure to U.S. dollar-denominated bonds issued by governments and corporations in emerging markets. Investing in EMB can offer Filipino investors access to higher yields and diversification benefits, as emerging market bonds often have lower correlation with traditional asset classes.
7. WisdomTree International SmallCap Dividend Fund (DLS)
The WisdomTree International SmallCap Dividend Fund focuses on dividend-paying small-cap stocks from developed markets outside the United States. This exchange-traded funds offers exposure to smaller companies with growth potential and dividend income, providing diversification benefits for Filipino investors seeking international equity exposure beyond large-cap stocks.
Conclusion
Diversifying globally through international ETFs can help Filipino investors mitigate risk and capture growth opportunities across different markets and asset classes. By incorporating these seven international ETFs into their portfolios, investors in the Philippines can achieve broader diversification and potentially enhance their long-term investment returns.
Moreover, investing in global markets allows Filipino investors to reduce their dependence on the local economy and take advantage of emerging trends worldwide. Different regions and industries perform uniquely based on economic cycles, geopolitical events, and technological advancements. By spreading investments across multiple markets, investors can benefit from opportunities that may not be available domestically, ensuring a more balanced and resilient portfolio.
Additionally, international diversification provides a hedge against currency fluctuations and inflation risks in the Philippines. When one market experiences downturns, gains in other regions can help offset losses, stabilizing overall returns. Staying informed about global economic trends, company performance, and market conditions will enable investors to make well-informed decisions and maximize the benefits of a globally diversified investment strategy.
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