3 International ETFs That Could Outperform the S&P 500 This Year

"Vanguard Total International Stock Index Fund (VXUS) is the simplest expression of the international rotation trade. It tracks the FTSE Global All Cap ex US Index, giving investors exposure to developed and emerging markets across thousands of companies in a single fund."

"The performance gap versus US equities is already visible. VXUS has returned about 4% year-to-date through March 17, while SPY has lost ground over the same stretch. Over the past twelve months, VXUS returned 26%, a number that would have surprised most investors who spent years watching international underperform."

"The cost case for VXUS is hard to argue with. The expense ratio is 0.05%, which means virtually nothing comes out of returns for fund expenses. For investors who simply want to own the world outside the US at minimal cost, this is the cleanest vehicle available."

The S&P 500 has declined about 2% in 2026, while international equities have risen, driven by factors like Germany's fiscal expansion and elevated US valuations. Vanguard Total International Stock Index Fund (VXUS) provides broad exposure to global markets with a low expense ratio of 0.05%, returning 26% over the past year. Fidelity Enhanced International ETF (FENI) offers a different strategy, focusing on developed markets with a smarter tilt. These ETFs reflect a renewed interest in international stocks not seen in years.

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