Unlocking Global Value: Top 3 Diversified ETFs for Cost-Conscious Investors

September 8, 2025
By Thomas Harding, Senior Financial Correspondent

A surge in uncertainty within United States financial markets is driving investors to explore opportunities abroad. Despite a rebound from earlier dips linked to trade concerns, several international and value-focused Exchange Traded Funds (ETFs) have generated returns that eclipse the year-to-date gains of the S&P 500, which currently stands at 10.2%.

Elevated valuations of U.S. equities, combined with ongoing volatility stemming from trade disputes and evolving regulations, are fueling this shift towards non-U.S. investments. Specifically, interest is growing in international value strategies, with a particular emphasis on small-capitalization and dividend-paying stocks. Three ETFs, in particular, are capturing investor attention with year-to-date returns exceeding 21%.

Vanguard Total International Stock ETF (VEU): Broad Exposure at a Low Cost

The Vanguard Total International Stock ETF is recognized as a leading choice for investors seeking broad international exposure. Boasting approximately $50 billion in assets under management and a considerable average monthly trading volume exceeding 2.8 million shares, this ETF presents a remarkably low expense ratio of just 0.04%. Adding to its appeal, VEU distributes an annual dividend of $1.84 per share, resulting in a 2.65% yield.

VEU offers comprehensive coverage across global equity markets, holding nearly 3,800 stocks. However, investors should note its portfolio composition. While encompassing both emerging and developed markets,emerging markets account for roughly 27% of the assets,with Europe constituting nearly 40%. Furthermore, the fund is heavily weighted toward large-cap companies, perhaps limiting exposure to smaller, high-growth firms internationally.

iShares Core MSCI EAFE Value ETF (EFV): Focused on Developed Market Value

in contrast to VEU’s expansive approach, the iShares Core MSCI EAFE Value ETF adopts a more targeted strategy.EFV concentrates on stocks from developed markets outside of North America, prioritizing companies exhibiting value characteristics – those trading at low price multiples. With over 400 holdings, the fund primarily focuses on large-cap companies.

EFV’s geographic distribution, while diversified, is concentrated in a select number of countries. Japan, the United Kingdom, and Germany collectively represent around half of the portfolio’s investments.No single stock accounts for more than approximately 2.3% of the total assets.This fund offers a dividend yield of 3.37% and has delivered returns exceeding 31% this year, validating its value-focused investment process. Its expense ratio stands at a competitive 0.33%.

Avantis International Small Cap Value ETF (AVDV): A Niche strategy with Strong Performance

The Avantis International Small cap Value ETF distinguishes itself with a unique focus on undervalued small-cap companies in developed markets. This recently launched fund, with roughly $11.8 billion in assets, has an average monthly trading volume exceeding 400,000 shares.

AVDV’s portfolio comprises over 1,400 holdings across various sectors and regions. Industrials, materials, and financial companies are notably prominent, with Japanese companies making up a substantial portion of the fund.Despite this concentration, the fund maintains adequate regional diversification. Investors have been rewarded with approximately 34% returns this year, alongside a 3.58% dividend yield. This specialized ETF maintains a comparatively low expense ratio of 0.36%.

Hear’s a comparative look at these etfs:

ETF Ticker	Expense Ratio	Dividend Yield (Approx.)	Year-to-Date Return (Approx.)	AUM (Approx.)
VEU	0.04%	2.65%	21% +	$50 Billion
EFV	0.33%	3.37%	31% +	–
AVDV	0.36%	3.58%	34% +	$11.8 Billion

Did You Know? The performance of international ETFs can be influenced by currency fluctuations, making them a potentially valuable hedge against a weakening U.S. dollar.

Pro tip: Before investing in any ETF, carefully review its prospectus to understand its investment strategy, risks, and associated fees.

Will these trends in international investment continue as global economic conditions evolve? What role will geopolitical factors play in shaping the future of international ETF performance?

Understanding international ETFs

International ETFs offer a diversified way to invest in companies outside of your home country. They can provide exposure to different economies,currencies,and growth opportunities. Investing in these funds can mitigate risk by reducing reliance on a single market.

Though, it’s crucial to be aware of the inherent risks associated with international investing, including currency risk, political instability, and differing regulatory environments.

Frequently Asked Questions About International ETFs

• What are international ETFs? International ETFs are exchange-traded funds that invest in stocks from countries outside of the United States.
• Why invest in international ETFs? They offer diversification, exposure to different economies, and potential for higher returns.
• What is the expense ratio of an ETF? the expense ratio is the annual fee charged to manage the ETF’s assets, expressed as a percentage.
• What is dividend yield? Dividend yield represents the annual dividend payout as a percentage of the ETF’s share price.
• Are international ETFs risky? Yes,they carry risks such as currency fluctuations and political instability.
• How do I choose the right international ETF? Consider your risk tolerance, investment goals, and desired level of diversification.

Share your thoughts on international investing in the comments below!

How does regular rebalancing, as described in the text, contribute to maintaining a desired asset allocation?

What are Diversified ETFs and Why Use Them?

Diversified Exchange Traded Funds (ETFs) offer a simple, cost-effective way to gain exposure to a broad range of assets, reducing risk through asset allocation. Instead of putting all your eggs in one basket – like a single stock – you’re spreading your investment across numerous companies and potentially different countries.This is particularly appealing for long-term investing and those new to the market. ETFs generally have lower expense ratios than actively managed mutual funds, meaning more of your investment returns stay in your pocket. Key benefits include:

Diversification: Reduced risk through exposure to a wide range of holdings.

Low Cost: Typically lower expense ratios compared to mutual funds.

Liquidity: ETFs trade like stocks, offering easy buying and selling.

Transparency: ETF holdings are usually published daily.

Vanguard Total World stock ETF (VT) – The All-in-one Solution

The Vanguard Total World Stock ETF (VT) is a powerhouse of global diversification. With an incredibly low expense ratio (currently around 0.07%), VT provides exposure to stocks from both developed and emerging markets. This means you’re investing in companies across the globe, from the US and europe to Asia and Latin America.

Holdings: Over 9,000 stocks representing large,mid,and small-cap companies.

Expense Ratio: 0.07% (as of September 8, 2025 – always check the latest prospectus).

Geographic Breakdown: Approximately 52% US, 38% International Developed Markets, and 10% Emerging Markets.

Ideal For: Investors seeking maximum global diversification in a single fund. It’s a core holding for many portfolio strategies.

Risk Level: Moderate – reflects the inherent volatility of the global stock market.

Real-World Example: A retiree looking for a simple,globally diversified portfolio could allocate a significant portion of their assets to VT,providing broad market exposure with minimal effort.

iShares Core MSCI EAFE ETF (IEFA) – Focusing on Developed International Markets

If you already have significant US stock exposure and want to specifically increase your allocation to international stocks, the iShares Core MSCI EAFE ETF (IEFA) is an excellent choice. “EAFE” stands for Europe, Australasia, and Far East, representing developed markets excluding the US and Canada.

Holdings: Over 2,000 companies in 21 developed countries.

Expense Ratio: 0.32% (as of September 8, 2025 – verify current rates).

Top Countries: Japan, United Kingdom, France, Germany, and Australia.

Ideal for: Investors wanting to complement US holdings with exposure to established international economies.Useful for international diversification.

Risk Level: Moderate – similar to VT, but with a concentrated focus on developed international markets.

Practical Tip: Consider pairing IEFA with a US total market ETF (like VTI) to create a well-rounded, globally diversified portfolio.

Schwab Total Stock Market International ETF (SCHF) – Emerging Markets exposure

For investors seeking to tap into the growth potential of emerging markets, the Schwab total Stock Market International ETF (SCHF) offers a compelling option. SCHF provides broad exposure to companies in developing economies, including China, India, Brazil, and Taiwan.

Holdings: Over 1,700 companies across both developed and emerging international markets.

Expense Ratio: 0.06% (as of September 8, 2025 – confirm current expense ratio).

Emerging Market Allocation: Approximately 20-25% of the portfolio.

Ideal For: Investors comfortable with higher volatility in pursuit of potentially higher returns. A good addition to a global investment strategy.

Risk Level: Higher – Emerging markets are generally more volatile than developed markets.

Case Study: In 2024, despite global economic headwinds, several emerging markets experienced significant growth, demonstrating the potential benefits of including these regions in a diversified portfolio. However, it’s crucial to understand the associated risks.

Understanding Expense Ratios and Total Cost of Ownership

When choosing ETFs, don’t just focus on the headline expense ratio.consider the total cost of ownership, including:

Expense Ratio: The annual fee charged to manage the fund.

Trading Costs: Brokerage commissions and bid-ask spreads.

Tracking Error: The difference between the ETF’s performance and its underlying index.

Lower expense ratios can considerably impact your long-term returns, especially with compound interest. Even a small difference of 0.1% can add up over decades.

Rebalancing Your ETF portfolio

Regularly rebalancing your ETF portfolio is crucial to maintain your desired asset allocation. This involves selling some holdings that have performed well and buying those that have underperformed, bringing your portfolio back to its original target percentages.

* Frequency: Annually or