This Cheap International ETF Does One Job Very Well

"IDEV tracks the MSCI World ex USA IMI Index, capturing large, mid, and small-cap stocks across developed markets outside the United States. The portfolio is anchored in Japan at 21.37%, the United Kingdom at 12.89%, and Canada at 12.21%. Moreover, continental Europe fills out most of the rest through France, Switzerland, and Germany. There is no emerging market exposure here."

"Thus, you are buying earnings and dividends from roughly two thousand companies operating in stable legal regimes. The have no leverage, no options overlay, and no derivatives bolted on. No single company is individually large enough to wag the fund."

"The fund holds $27.5 billion in net assets and has been running since March 2017, long enough to have a record across rate cycles. Over the trailing twelve months IDEV returned 24.19%, with year-to-date gains of 5.53% and a five-year cumulative return of 51.15%. Since inception in early 2017, total return reached 121.8%."

"The honest comparison is to Vanguard FTSE Developed Markets ETF ( NYSEARCA:VEA), which charges 0.03% and returned 30.7% over the past year and 55.6% over five years. VEA tracks a different FTSE index with slightly different country weightings (it includes Korea as developed, IDEV does not), which explains most of the recent gap. Both funds do essentially the same job for essentially the same price. The difference between four basis points and three basis points on a $10,000 position is one dollar a year. Stop optimizing."

IDEV is designed to capture large, mid, and small-cap stocks across developed markets outside the United States by tracking the MSCI World ex USA IMI Index. The portfolio is heavily weighted toward Japan, the United Kingdom, and Canada, with additional exposure across continental Europe through countries such as France, Switzerland, and Germany. The fund has no emerging market exposure and holds roughly two thousand companies operating in stable legal regimes. Holdings are described as lacking leverage, options overlays, and derivatives. IDEV charges 0.04% annually and has delivered strong performance across rate cycles, with reported returns of 24.19% over the trailing twelve months and 51.15% over five years.

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