Loading the player...

DEFINITION of 'International ETF'

Any exchange-traded fund that invests in foreign-based securities. The focus may be global, regional (such as Latin America, Asia-Pacific, etc.) or on a specific country.

International ETFs are invested passively around an underlying index, but the index may vary substantially from one fund manager to the next. Some funds, especially those with a wide global footprint or those that invest in countries with advanced economies, can provide strong diversification by investing in hundreds of companies.

BREAKING DOWN 'International ETF'

ETFs that invest in a single foreign country may carry higher risks than international ETFs that spread their investments among many countries. If a single country undergoes a major recession or other financial hardship, an ETF that only invests in securities based there could have a major performance shortfall.

International ETFs are becoming a widespread investment vehicle for U.S. investors, as many global economies are growing at a faster rate and, thanks to rapid advances in globalization and financial regulation, their financial markets are opening to outside investment.

In general, expense ratios for international ETFs tend to be higher than the averages because of the higher costs to invest abroad.

RELATED TERMS
  1. ETF Of ETFs

    An exchange-traded fund (ETF) that tracks other ETFs rather than ...
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for ...
  3. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  4. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
  5. Intelligent ETF

    An exchange-traded fund (ETF) that employs an active investment ...
  6. IPO ETF

    An exchange-traded fund that focuses on stocks that have recently ...
Related Articles
  1. Investing

    Exchange-Traded Funds (ETFs)

    This vehicle combines the diversification of a mutual fund with the flexibility of a stock. Learn more about them here.
  2. Investing

    The Advantages of ETFs Compared to Index Funds

    With the ongoing ETF boom, ETFs gain more variety and increased competition in the market leads to further investors' advantages compared to index funds.
  3. Investing

    A Look At the Growth Of the ETF Industry

    Explore the phenomenal growth rate of the ETF industry, and learn some of the principal reasons why ETFs are projected to continue to grow at a rapid pace.
  4. Investing

    Global Equity ETFs to Date 2016 Performance Review (EEM, EDC)

    Learn how to diversify your investments internationally. Discover the best and worst performing global ETFs for your portfolio in 2016.
  5. Investing

    4 Ways to Evaluate ETFs Before Buying

    Learn four areas in which to evaluate an ETF investment to be sure that the investor has a clear understanding of the security being purchased.
  6. Investing

    How To Pick The Best ETF

    Of the hundreds of exchange-traded funds on the market, some are bound to fail. Learn how to pick the best of the bunch.
  7. Investing

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  8. Investing

    4 Ways to Get International Exposure in Your Portfolio

    International investing provides diversification, which is needed these days. When it comes to investing in foreign stocks, there are lots of options.
RELATED FAQS
  1. What is a country ETF?

    Learn about the operational basics of exchange-traded funds (ETFs) and the foreign investment opportunities and advantages ... Read Answer >>
  2. What exactly is an ETF portfolio?

    Learn what exchange-traded funds (ETFs) are and their advantages to investors, what a portfolio of ETFs is, and discover ... Read Answer >>
  3. Should I invest in ETFs or index funds?

    Learn advantages to investing in exchange-traded funds, or ETFs, and index funds, and decide whether to include them in your ... Read Answer >>
  4. What's the difference between an index fund and an ETF?

    Learn about the difference between an index fund and an exchange-traded fund and how index fund investing compares to value ... Read Answer >>
  5. Who regulates the various types of exchange traded funds (ETFs)?

    Discover who regulates various types of exchange-traded funds. The share of investment capital going towards ETFs continues ... Read Answer >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  4. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  6. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
Trading Center