International ETF

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. Inverse ETF

    An exchange-traded fund (ETF) that is constructed by using various ...
Related Articles
  1. Mutual Funds & ETFs

    Exchange-Traded Funds: Introduction

    Exchange-traded funds (ETFs) can be a valuable component for any investor's portfolio, from the most sophisticated institutional money managers to a novice investor who is just getting started. ...
  2. Investing Basics

    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. Mutual Funds & ETFs

    Exchange-Traded Funds: Conclusion

    Although the first exchange-traded funds (ETFs) were designed to track broad market stock indexes, since that time, ETFs have been developed to track industrial sectors, investment styles, fixed ...
  4. Mutual Funds & ETFs

    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.
  5. Mutual Funds & ETFs

    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.
  6. Mutual Funds & ETFs

    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.
  7. Mutual Funds & ETFs

    How To Avoid Expensive ETFs

    Discover four tips for avoiding expensive ETFs. Learn why expense ratios should be low and how to prevent your investment from costing you come tax time.
  8. Mutual Funds & ETFs

    When Is the Right Time to Change From Mutual Funds to ETFs

    Find out how to determine when it's the right time for you to switch from mutual funds to ETFs, including the benefits of ETFs and who they are best for.
  9. Mutual Funds & ETFs

    4 Things to Know Before Choosing an ETF

    ETFs are a low-cost way to get exposure to different markets. But they're not all the same. Investors should research the following key information regarding the ETF before buying it.
  10. Mutual Funds & ETFs

    5 Reasons Why ETFs Work For Young Investors

    ETFs contain all of the characteristics that make them the perfect investment opportunity for young investors.
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. 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 >>
  3. 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 >>
  4. 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 >>
  5. Do ETFs pay capital gains?

    Learn about exchange-traded funds (ETFs), which can generate capital gains for their shareholders due to occasional and substantial ... Read Answer >>
  6. What gives the best results, an index fund or an ETF?

    Investing in ETFs or index funds is a matter of personal choice, but market logic advocates ETFs for rebalancing funds and ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center