Top Low-Cost International ETFs To Watch in 2026
It’s no great secret that domestic financial markets were more than a little uneven in 2025. While some market sectors and asset classes saw reasonable gains, volatility was a constant factor, due largely to uncertainty over foreign trade policies and concerns about inflation. Ongoing worries over the possibility of an AI bubble loom over the market, and even seasoned investors are looking for calmer seas and safer harbors. But with the majority of U.S. market valuation being held by a relatively small number of tech titans heavily vested in AI, which is still a poorly understood and developing technology, domestic investors aren’t sure where to turn.
That’s left a lot of investors looking at the international markets, specifically international equities and low-cost exchange traded funds, or ETFs, as a safe way to diversify out of the crowded U.S. market and its feared unpredictability. Though international markets are affected in some part by the performance of U.S. stocks, it’s not a 1:1 relationship by any means, and provides some much-needed built-in protection against “the bigger they are, they harder they fall” fears here at home.
The Case for International Diversification
A handful of tech giants continue to dominate domestic markets. Megaliths like Nvidia, Apple and Microsoft have created the kind of returns investors dream about, but there’s a significant downside. They’ve created a top-heavy market, with the top 10 U.S. stocks accounting for over one-third of total market value. That amount of concentration brings with it considerable risk. If the stocks at the top of the market experience significant downturns, such as might be caused by an AI bubble bursting, that would leave a lot of investors facing losses.
Instead of keeping all of their eggs in one basket, many investors are eyeing international markets. While they represent roughly 75% of global GDP, international stocks only account for about half of the global stock market cap. This means the U.S. market is significantly overvalued, especially from a global perspective. The “home bias” many U.S.-based investors have may turn troublesome for a variety of reasons, and moving investment capital to international markets is a good way to shed some of this risk.
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7 International Funds
Recently, analysts at the renowned investment research company Morningstar identified seven international equity funds and ETFs that are unilaterally labeled as “buy” by analysts. These funds are all gold-rated Morningstar Medalists with the lowest cost primary share classes and at least $100 million in assets.
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