If you think your portfolio is diversified, you have international exposure, right? Right? Often investors they are diversified, but have all of their portfolio in predominantly U.S. based funds. If you are thinking of putting some of your investments into international funds you should highly consider the following.
Vanguard FTSE All-World ex IS Index Fund (VFWIX)
When you are looking to invest wisely you should always look to diversify and make sure that the core of your investment portfolio is in total market index funds. Even though other companies have tried to compete with Vanguard in this respect, no one can compare. Some might find this fund a bit pricey when you first invest, but Vanguard has a long term reputation of lowering the costs as your fund grows. VFWIX is a fairly young fund and as it matures investors also believe that will bring the prices down some and long term investors should really not worry about fees anyway.
Vanguard International Explorer (VINEX)
This fund by Vanguard had been unavailable for some time and just opened back up recently. Investors looking for an international fund should take a close look at this one as it has ranked high, in the top 21% of small and international mutual funds for the last decade. The returns have been more than respectable even as other funds have had difficulty in keeping up with rates of inflation. Investors have a great opportunity here to invest internationally for low fees and a decent return.
Vanguard FTSE All World ex US Small Cap Index Fund (VFSVX)
The final recommended Vanguard fund is their recently debuted small cap index fund. This one again may be considered a bit costly with a current .78% expense ratio, but when you look at the average costs of international small cap funds, the price is really a bargain. Just like other Vanguard funds, the costs will most likely come down as investments grows. Bottom line, if you are looking for an international small cap fund, this is a good bet.
Oakmark International (OAKIX)
While this fund comes with a steep price tag of a 1.1% expense ratio, the history of returns on the fund can make the investment more than worth it. During the last decade the fund has consistently come out at the top having been in the top 1% across all international mutual funds. While no one knows if the fund will be able to keep up with its past performance it is worth considering as an investment option. Some investors do caution though that you should not put your entire investment on the line here. Since it is more of a high risk choice your allocation is probably best kept between 10% and 20%.
Dodge And Cox International Stock (DODFX)
Dodge and Cox has been around for the long haul and since they first introduced a fund back in 1931, they have built their reputation as a stable place to invest. The company has stayed true to themselves and taken their time in choosing what funds to introduce and they have all withstood the test of time. Since the DODFX first began it has consistently produced well, in the top 10%. Its expense ratio is also low coming in at just .64%. While the fund can throw some taxable gains, generally it is not enough to be of any concern. Bottom line, this fund is a great stable investment choice.