This International ETF Might Be a Better Buy Than the VOO or QQQ

"The international ETFs have had quite the impressive year, outperforming the likes of the Vanguard S&P 500 ETF ( NYSEARCA:VOO) as well as the Invesco QQQ Trust ( NASDAQ:QQQ) so far this year while rolling over far fewer bumps in the road. Undoubtedly, time will tell how much longer the international ETFs can outperform the S&P 500 or Nasdaq 100. Either way, the valuations still look quite stellar with the ETFs that go above and beyond the U.S. market."

"The Nasdaq 100 index, in particular, is a cheap way to become overweight in the Magnificent Seven names, which are bound to soar higher if the AI trade is due for another leg higher. Though the performance of the seven names will vary, I do think that the group remains one of the most powerful forces in AI as many of the top players race to achieve some form of superintelligence over the coming decade."

International ETFs have outperformed major U.S. indices this year while experiencing fewer setbacks and offering attractive valuations compared with many U.S. funds. Geographic diversification can capture markets with stronger valuation edges and provide exposure to AI innovators outside the U.S. The Nasdaq 100 provides concentrated exposure to the Magnificent Seven, which remain central players in AI and could rally if the AI trade extends further. Those seven firms carry high valuations and heavy spending, so investors should balance ownership of them with stakes in international AI winners. Global competition in AI could produce significant non-U.S. winners and justify broader ETF allocations.

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