The International ETF for Investors Looking Beyond U.S. Stocks

International stocks person mostly outperformed U.S. stocks this year, continuing the outperformance inclination from past year.

And immoderate starring strategists expect continued spot successful planetary markets driven by charismatic valuations, a weakening dollar, defence and infrastructure spending, and different maturation trends.

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The glow up for planetary stocks makes them an charismatic enactment for portfolio diversification. A large mode to diversify internationally is done an exchange-traded money (ETF) that invests successful lone stocks from overseas markets.

While determination are dozens of coagulated options, 1 of the implicit champion planetary ETFs retired determination is the Invesco S&P International Developed Momentum ETF (NYSEMKT: IDMO).

Riding the momentum

The Invesco S&P International Developed Momentum ETF tracks the S&P World Ex-U.S. Momentum Index. That portfolio consists of astir 192 planetary stocks from developed markets with the highest momentum scores wrong the larger S&P World Ex-U.S. Index, which tracks astir 1,000 large-cap and mid-cap planetary stocks.

The momentum stocks successful the portfolio are those with amended caller show and upward terms movements than different stocks successful the larger index. So, astatine each times, the ETF strives to clasp the stocks that are outperforming.

The portfolio is composed mostly of stocks from developed European and Asian nations (except Korea, which is excluded), on with the U.S. Japanese stocks comprise 22% of the fund, followed by Canada astatine 16% and the U.K. astatine 13%. Spain represents 10% of the stocks, portion Germany makes up 8%.

The 3 largest holdings are HSBC Holdings, based successful London, Toronto-Dominion Bank, based successful Canada, and Banco Santander, based successful Spain.

Built to outperform

The ETF is designed to outperform, based connected its momentum structure, and it has done so. This year, IDMO is up astir 8% twelvemonth to date, which is somewhat amended than the 7% instrumentality for the S&P 500.

Over the agelong term, it has been 1 of the best-performing planetary ETFs. It has a five-year mean annualized instrumentality of 16.2%, which is among the champion successful its people of planetary ex-U.S. ETFs.

The Invesco S&P International Developed Momentum ETF's five-year show adjacent beats some the Russell 1000 and the S&P 500. Over the past 5 years, the Russell 1000 has averaged astir a 12.6% annualized return, portion the S&P 500 has averaged a astir 13.4% annualized instrumentality implicit that stretch.