3 Great International ETFs for 2025 and Beyond

#Morningstar #BestInternationalETFs #ETFInvesting The future looks bright. 00:00 Introduction 00:29 Schwab International Dividend Equity ETF SCHY 01:23 Vanguard International Dividend Appreciation ETF VIGI 02:30 iShares MSCI International Quality Factor ETF IQLT Daniel Sotiroff: As we enter the new year, I suspect a lot of you are reviewing your investments and your probably getting tired of what’s happening, or should I say, what isn’t happening with your foreign stock ETFs. I get it. Foreign stocks have, yet again, trailed the US market by a pretty healthy margin. There are ways to be successful with foreign stocks, but it requires some patience, and you do have to pick your spots carefully. So, with that in mind, let’s take a look at some options that should stand out in the years to come. First up for today is Silver-rated Schwab International Dividend Equity ETF, which trades under the ticker SCHY. It’s the international cousin of fan-favorite Schwab US Dividend Equity ETF, commonly known by its ticker SCHD. SCHY essentially follows the same process as SCHD, but it applies those rules to overseas stocks. It’s best thought of as a defensive value strategy, and that should help it carve out an edge. It prefers stocks with higher-than-average dividend yields, which tilts it toward the cheaper side of the foreign market. But it prioritizes companies that are profitable, have made regular cash dividend payments for at least 10 consecutive years, and are among the least volatile in the foreign market. That means it holds a diverse set of stocks that tend to have high yields, but its holdings possess the financial stability to continue making those dividend payments in the future. Another dividend fund that lands among our favorites: Gold-rated Vanguard International Dividend Appreciation ETF, ticker VIGI, is one that Bryan, Ryan, and myself have talked about a lot here before, really because we love the investment process. But it’s a little bit different from SCHY in that it doesn’t care for yield. Instead, VIGI prioritizes profitable stocks that have maintained or raised their regular cash dividend payments over seven years or more. That’s a really high hurdle, and few stocks can overcome it. Those that do tend to have a stronger financial foundation, and they tend to be more profitable. Persistent dividend payers like SAP and Infosys have helped VIGI outperform the broader foreign stock market over the last several years. It beat the MSCI ACWI EX USA Index by 1.1 percentage points annualized from its late-February 2016 launch through November 2024, with most of the benefit coming over the past three years when markets got bumpy. Its consistent exposure to high-quality stocks should help it stay on top of its category index. Another ETF that favors high-quality stocks is Silver-rated iShares MSCI International Quality Factor ETF, or ticker IQLT. It takes a much more direct route to build its portfolio than VIGI. This ETF isn’t really concerned about dividend payments. Instead, it strictly searches for stocks with the highest profitability and lowest debt ratios in the foreign developed-markets opportunity set. It ties its sector weights back to the broader foreign stock market to control its exposure to risks that may not be compensated over the long run. Overall, it’s a pretty solid investment, and it has performed that way as well. It beat the broader foreign market by 2 percentage points annualized from its January 2015 inception through November 2024. And it still possesses characteristics that should help it outperform in the future. What to watch from Morningstar. 3 Great US ETFs for 2025 and Beyond    • 3 Great US ETFs for 2025 and Beyond   3 ETFs Full of Wide-Moat Stocks    • 3 ETFs Full of Wide-Moat Stocks   3 Great ETFs Having a Lousy 2024    • 3 ETFs Full of Wide-Moat Stocks   3 Great Contrarian ETFs    • 3 Great Contrarian ETFs   Read what our team is writing. Daniel Sotiroff https://www.morningstar.com/people/da... Follow us on social. Facebook:   / morningstarinc   X:   / morningstarinc   Instagram:   / morningstar.  . LinkedIn:   / 5161