How to Invest in International Stocks and ETFs in 2026

Investing only in US stocks means putting 100% of your portfolio in one country, one currency, and one economic cycle. The US represents roughly 60% of global stock market value, which means skipping international stocks is skipping 40% of the investable world entirely.

International stocks give your portfolio exposure to faster-growing economies, different industries, and companies you cannot buy on US exchanges. They also protect you when US markets underperform, as they have in several extended periods throughout history.

This guide covers exactly how to invest in international stocks in 2026: the best ETFs to use, how much of your portfolio to allocate abroad, the difference between developed and emerging markets, and what to watch out for along the way.

Should You Invest in International Stocks?

This is the first question most investors ask, and the honest answer is: probably yes, but the exact amount is debatable.

The Case For International Stocks

Diversification that actually works. US and international markets do not always move together. When US stocks struggled from 2000 to 2010 (often called the “lost decade”), international stocks significantly outperformed. When you hold both, poor performance in one region is partially offset by better performance in another.

Access to global growth. Many of the world’s fastest-growing economies are outside the US. Countries like India, Brazil, Vietnam, Indonesia, and others have younger populations, expanding middle classes, and economic growth rates that dwarf US GDP growth. Emerging market stocks give you exposure to that growth.

Valuation advantage. International stocks have historically traded at lower price-to-earnings ratios than US stocks. Whether that discount reflects genuine risk or genuine opportunity is debated, but cheaper valuations mean you are buying more earnings per dollar invested.

Currency diversification. When you hold stocks denominated in euros, yen, or British pounds, you benefit if those currencies strengthen against the dollar. This can add or subtract returns depending on currency movements.

The Honest Counterarguments

US stocks have dominated for 15 years. From 2010 to 2024, US stocks significantly outperformed international stocks. Investors who went heavy international during this period underperformed those who stayed US-focused. Past performance does not guarantee future results in either direction, but US stock dominance has been extended and dramatic.

Many US companies are already global. Apple generates more than half its revenue outside the US. Coca-Cola sells in 200 countries. McDonald’s is everywhere. Owning US large-cap stocks already gives you significant exposure to global economies through the companies themselves, not just through the markets they are listed on.

Higher costs and complexity. Some international funds have slightly higher expense ratios than their US counterparts. Emerging markets in particular can be more volatile and carry political and regulatory risk that domestic stocks do not.

Bottom line: Most financial advisors and the evidence from long-term studies support holding some international exposure, typically 20% to 40% of equities. Going to zero international is a concentrated bet on the US continuing to outperform. Going to 50% or more international is a concentrated bet the other direction. A balanced middle ground is generally sensible.

Developed Markets vs Emerging Markets: The Key Distinction

International stocks fall into two main buckets that behave very differently.

Developed Markets

Developed markets include economically mature countries with stable governments, strong rule of law, and liquid financial markets. The major developed market regions are:

• Europe: United Kingdom, Germany, France, Switzerland, Netherlands, Sweden, and others
• Asia-Pacific developed: Japan, Australia, South Korea, Hong Kong, Singapore
• Canada

Developed market stocks tend to be more stable than emerging markets, with lower volatility and more predictable regulatory environments. They also tend to grow more slowly, since these economies are already mature.

Emerging Markets

Emerging markets include countries with faster-growing but less stable economies. Major emerging markets include:

• Asia: China, India, Taiwan, Brazil
• Latin America: Brazil, Mexico, Chile
• Other: South Africa, Saudi Arabia, Indonesia

Emerging markets offer higher potential returns and higher volatility. Political risk, currency swings, and regulatory changes can cause significant short-term drops. India’s stock market, for example, has been one of the world’s best performers over the past decade, while China’s market has disappointed many investors who expected similar results.

Which Should You Own?

Most investors hold both through a single total international fund. If you want to customize, a common approach is to weight more toward developed markets (which are less volatile) and less toward emerging markets. A simple starting point: two-thirds developed, one-third emerging within your international allocation.

The Best International ETFs in 2026

For most investors, a single low-cost international ETF is all you need. Here are the strongest options.

VXUS: Vanguard Total International Stock ETF

VXUS is the single most popular international stock ETF and the one most index fund investors reach for first. It tracks over 8,000 stocks across 47 countries, covering the entire non-US developed and emerging world in one fund. The 0.07% expense ratio means you pay $0.70 per year for every $1,000 invested.

If you want one fund to cover all international exposure without any decisions about country weighting or fund combinations, VXUS is the default choice. It pairs naturally with VTI (Vanguard Total US Stock Market ETF) to create a complete global equity portfolio with just two funds. This is the foundation of the 3-fund portfolio strategy.

VEA: Vanguard FTSE Developed Markets ETF

VEA covers developed markets only, excluding emerging markets entirely. It is slightly cheaper than VXUS at 0.05% and appropriate for investors who want international exposure but prefer to avoid emerging market volatility. Japan, the United Kingdom, Canada, France, and Germany make up the largest country weights.

If you want to customize your emerging market allocation separately (or skip it), pair VEA with VWO in whatever ratio suits your risk tolerance.

VWO: Vanguard FTSE Emerging Markets ETF

VWO gives dedicated emerging market exposure. China, India, Taiwan, and Brazil are typically the largest holdings. This fund is more volatile than VEA or VXUS because emerging markets experience larger swings in both directions. Over long periods, emerging markets have the potential for higher returns, but also for extended disappointing stretches (China is the most prominent recent example).

VWO is best used in combination with VEA rather than as a standalone international holding, unless you have a specific thesis about emerging market outperformance.

IXUS: iShares Core MSCI Total International Stock ETF

IXUS is the iShares equivalent of VXUS. Both cover the total non-US international market at 0.07% expense ratio. The main difference is the underlying index (FTSE for VXUS, MSCI for IXUS) which leads to slightly different country classifications, particularly for South Korea. Both are excellent choices. If you use Fidelity or BlackRock products primarily, IXUS may be more convenient. If you use Vanguard, VXUS is the natural fit.

SWISX: Schwab International Index Fund

SWISX is a mutual fund (not an ETF) that covers developed international markets at 0.06% with no minimum investment. It is ideal for Schwab account holders who prefer mutual funds for automatic monthly investing, since you can invest exact dollar amounts rather than buying whole ETF shares. For Schwab users, it pairs naturally with SCHB (US total market) and SCHF (international developed) for a streamlined portfolio.

ETF Comparison at a Glance