The best international share ETF

Morning Star AU06-03

The most popular ETF in Australia is an international ETF. This should take no one by surprise – many investors are looking to get exposure to more than what the Australian market offers. ETFs are an ...

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ETFs are an ...</p>\n\n<a href=\"https://www.morningstar.com.au/etfs/best-international-share-etf\">Source Link</a>\n\n</div>\n","source":"morningstar_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The best international share ETF</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe best international share ETF\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-06-03 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.morningstar.com.au/etfs/best-international-share-etf><strong>Morning Star AU</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The most popular ETF in Australia is an international ETF. This should take no one by surprise – many investors are looking to get exposure to more than what the Australian market offers. ETFs are an ...</p>\n\n<a href=\"https://www.morningstar.com.au/etfs/best-international-share-etf\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"VEU","symbol_name":"Vanguard FTSE All-World ex-US ETF","start_time":0,"source_url":"https://www.morningstar.com.au/etfs/best-international-share-etf","article_id":"2640897371","we_media_id":null,"thumbnails":[],"rights":{"source":"morningstar_stock","url":"https://www.morningstar.com.au/etfs/best-international-share-etf","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2640897371","pubTimestamp":1780416000,"columns":[],"sourceInfo":{"source_id":"morningstar_stock","name":"Morning Star"},"weMediaInfo":null,"summary":"The most popular ETF in Australia is an international ETF. 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This should take no one by surprise – many investors are looking to get exposure to more than what the Australian market offers. ETFs are an easy, cheap and quick way to do this. Australian investors are much more comfortable with investing directly in domestic shares, meaning that an international ETF appeals not just to ETF investors, but to all investors looking to easily gain international exposure. International markets can fill several holes in an Australia-focused portfolio. They provide exposure to other markets and companies including sectors and industries that Australia may be lacking – such as technology and healthcare. This provides diversification from Australia’s highly concentrated market that focuses on financials and materials.The question is which international ETF to choose as there are substantial differences between available options. It’s important for investors to understand what they are investing in, and how an investment aligns with their portfolio goals. The ‘best ETF’ is different for each investor.Source: Morningstar Direct, at 1 June 2026. Based on Morningstar Category, Australia Fund Equity World optionsThe top four ETFs show the different choices available to investors in action. Some investors may want to tilt towards higher quality companies, others may prefer a concentrated portfolio of global blue chips, while some may want to reduce their dependence on the United States.Morningstar analysts currently cover a broad range of global equity ETFs. While VGS remains our preferred choice for broad market exposure, several alternatives offer distinct characteristics that may appeal to different investors.Below, I run through the top 4 global ETFs, the investors they may suit and our analysts’ verdict.Vanguard MSCI International Shares ETF (VGS): Broad global exposure If you’re looking for a single ETF that captures the growth of global share markets, VGS remains difficult to beat.The fund tracks the MSCI World ex Australia Index, providing exposure to approximately 1,269 large and mid-sized companies across 22 developed markets (at 30 April 2026). The portfolio includes many of the world’s most successful businesses, including technology giants, healthcare leaders, consumer brands and industrial companies.It is highly concentrated in the United States, with exposure to the country making up more than 70% of the index.Source: Morningstar Portfolio X-Ray, VGS region exposure at 28 May 2026.One of the key characteristics of VGS is its market-cap weighted approach. Rather than making active bets on which companies or sectors will outperform, the fund owns companies in proportion to their size. As companies grow they naturally become larger positions within the portfolio. Turnover is relatively low compared to active or factor-based investing, minimising transaction costs.Vanguard also adds value through implementation. The objective is to track the index as closely as possible, but the team uses several techniques to minimise tracking error. This includes using futures to keep cash invested, managing index rebalances efficiently and engaging in securities lending. Importantly, all net securities lending revenue is returned to investors.The result is a portfolio that provides broad diversification at a very low cost. With a fee of 0.18% per year, VGS sits among the cheapest global equity funds available to Australian investors.Morningstar analysts award VGS a Gold rating and consider it one of the strongest options available for investors seeking broad international market exposure. For investors who do not have a specific view on regions, sectors or investment styles, VGS remains the benchmark against which other global equity ETFs should be measured.Vaneck MSCI International Quality ETF (QUAL): A quality tilt Some investors are comfortable accepting a little more concentration in exchange for owning businesses with stronger financial characteristics. That’s where VanEck MSCI International Quality ETF (QUAL) enters the picture.Rather than holding the entire market, QUAL focuses on approximately 300 companies selected from the MSCI World ex Australia universe. To make the cut, companies must score highly on measures including return on equity, earnings stability and low financial leverage.The philosophy behind quality investing is relatively straightforward. Companies that consistently generate high returns on capital, maintain strong balance sheets and deliver reliable earnings growth may be better positioned to create long-term shareholder value.The portfolio looks meaningfully different to a broad market ETF like VGS. Technology and healthcare companies receive larger allocations, while financials tend to be underrepresented because banks and other financial institutions typically employ significant leverage.Source: Morningstar Portfolio X-Ray, at 28 May 2026.QUAL also has a stronger quality profile than the broader market. More than three quarters of the portfolio carries a wide economic moat rating from Morningstar, reflecting durable competitive advantages and strong business franchises. Almost 15% have a narrow economic moat, meaning that close to all investments carry an economic moat according to Morningstar analysts.Source: Morningstar Portfolio X-Ray, QUAL Moat coverage at 28 May 2026.There are trade-offs for investors with this approach. The portfolio holds only around 300 companies, so it is significantly more concentrated than a broad market ETF with no tilts. Sector exposures can differ materially from the broader market and that means that performance will look different to the market. It may diverge for extended periods, so investors should be aware when including this ETF in their portfolio.The strategy also tends to have a growth bias. Many of its largest holdings include companies such as Apple, Nvidia, META and Microsoft. These businesses have attractive growth prospects, but you’ll pay higher prices for these characteristics as an investor. For investors seeking to tilt towards higher-quality companies through international diversification, QUAL represents a compelling option. Morningstar analysts assign the fund a Bronze rating and view it as a strong way to access global quality stocks at a reasonable cost of 0.40% p.a.iShares Global 100 ETF (IOO): A concentrated portfolio of global leadersAt the other end of the spectrum sits iShares Global 100 ETF (IOO).While VGS owns more than 1,200 companies and QUAL owns around 300, IOO holds only about 100 of the world’s largest multinational businesses.The ETF tracks the S&P Global 100 Index which selects large companies with substantial international operations and strong global footprints. The portfolio includes many of the world’s most recognisable brands.Source: Morningstar Portfolio X-Ray, top holdings of IOO at May 27, 2026.Rather than owning thousands of companies, investors gain exposure to a concentrated collection of strong global businesses. The portfolio includes many dominant businesses operating across multiple regions and industries.The portfolio is concentrated on multiple levels. Technology represents approximately 48% of the portfolio, substantially more than the index. US equities account for 80% of assets, and the top 10 holdings represent almost 60% of the fund.Source: Morningstar Portfolio X-Ray, IOO sector exposure.As in the case of QUAL, performance can differ significantly from broader international equity ETFs. Over the past decade, this concentration has worked in investors’ favour as technology mega-caps generated exceptional returns. There is no guarantee that this trend will continue.Below, IOO’s concentration has offered exceptional returns, comparative to VGS, a broad market index with no tilts, and VEU, global exposure excluding US.Source: Morningstar Investor. Comparison of IOO, VGS and VEU over 10 years (30/06/2016 – 01/06/2026)Investors considering IOO should recognise that they are making an implicit bet that the world’s largest companies will continue to outperform. While these businesses are often highly diversified and financially resilient, the portfolio sacrifices diversification in exchange for concentration.The fund charges 0.40% per year, making it more expensive than VGS and many other passive alternatives. Morningstar analysts currently assign IOO a Neutral rating. Our analysts view it as a reasonable option for investors specifically seeking concentrated exposure to global blue-chip companies, but not necessarily the best starting point for broad international diversification.Vanguard All-World ex-US Shares ETF (VEU): Global exposure, ex-US.One of the most common concerns among investors today is the dominance of the US market. All ETFs mentioned in this piece so far have significant exposure to the United States.Depending on the benchmark used, the United States represents around 70% of global developed-market indices. For investors who feel uncomfortable with that level of concentration, Vanguard All-World ex-US Shares ETF (VEU) offers an alternative. As the name suggests, VEU excludes the United States entirely. Instead it provides exposure to 3835 companies across developed and emerging markets outside the United States.The portfolio includes significant allocations to Japan, China, the United Kingdom, Canada, France and other international markets. It also includes exposure to emerging economies that are absent from many developed-market benchmarks.Source: Morningstar Portfolio X-Ray, VEU country exposure at April 30 2026.Most individual holdings account for less than 2% of assets and the portfolio spans thousands of companies across dozens of countries. This has not been seen in the ETFs topping the list.The obvious trade-off is that investors completely miss the world’s largest equity market. For US investors, an ex-US strategy often makes sense because they may already have significant domestic exposure. For Australian investors, the case is less straightforward. Excluding the US means excluding many of the world’s most innovative and profitable companies, including many of the technology leaders that have driven global equity returns over the past decade.That doesn’t mean VEU lacks merit. This ETF can serve a purpose for investors who already have substantial US exposure elsewhere, or those who want to diversify away from the US dominance.Cost is another strength. At just 0.04% per year, VEU is among the cheapest global equity ETFs available to Australian investors.Morningstar analysts assign the fund a Bronze medalist rating. While the exclusion of US equities may not suit every investor, the strategy provides an efficient and low-cost way to access the rest of the world’s markets.Which ETF is right for you?The best ETF ultimately depends on what role you want international equities to play in your portfolio and the rest of your holdings.For investors looking for a diversified and low-cost way to access global markets, VGS offers broad exposure, strong implementation and a low fee, ticking the boxes for a strong core holding. Investors who want to emphasise stronger businesses and are comfortable with some additional concentration may find QUAL appealing. The quality focus has historically produced a portfolio of highly profitable companies with durable competitive advantages.Those who prefer a more concentrated portfolio of global corporate leaders may gravitate towards IOO. The fund offers exposure to many of the world’s most successful companies, but there’s higher concentration risk.VEU may suit investors looking to reduce their dependence on the US market or complement existing US equity exposure.The good news is that investors are not limited to a single approach. Some may choose VGS as a core holding and add QUAL as a satellite position to increase quality exposure. Others may pair VGS with VEU to adjust regional allocations, aware of some overlap.Ultimately, the most important decision is not which of these ETFs is marginally better than another. It is developing a clear understanding of why you are investing internationally in the first place. International equities provide Australian investors with access to industries, companies and growth opportunities that simply don’t exist in any meaningful way in our domestic market.Each of the most popular international ETFs offer a distinct path to international exposure, but are in no way an exhaustive list. These are the four most popular global ETFs in Australia. Morningstar also awards medalist ratings to 7 active and 12 passive global equity picks, including 4 passive options in the world large blend categories. We also award medalist ratings to a few options in Equity North America, and Equity World mid/small categories. Like these four distinct ETFs, these products may also suit investors’ purposes.Invest Your WayFor the past five years, Mark and I have released a weekly podcast and written on morningstar.com.au to arm you with the tools to invest successfully. We’ve always strived to provide independent, thoughtful analysis, backed by the work of hundreds of researchers and professionals at Morningstar.We’ve shared our journeys with you, and you’ve shared back. We’ve listened to what you’re after and created a companion for your investing journey – Invest Your Way. Invest Your Way is a book that focuses on the investor, instead of the investments. It is a guide to successful investing, with actionable insights and practical applications.If anyone would like to support this project you can buy the book at the below links. It is also available in Kindle and Audiobook versions. Thanks in advance!Purchase from AmazonPurchase from BooktopiaGet Shani’s insights in your inbox","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.43.1","shortVersion":"4.43.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2640897371","isCrawlerRequest":true}