Best International Mutual Funds in 2024

The best international mutual funds in 2024 have a mix of low fees, diverse holdings and quality management.

In recent years, international investing has gotten a bad rap due to U.S. stock outperformance. However, you can still benefit from global diversification through balanced and affordable mutual funds. We’ve chosen 10 of the best to consider for your portfolio.

International Mutual Funds

International mutual funds offer a strategic way to diversify your investment portfolio beyond the shores of the United States. Investing in companies scattered across the globe can spread risk across different economies and mitigate the impact of market fluctuations at home. Additionally, international funds provide access to global growth opportunities. For example, emerging markets often exhibit higher growth rates than developed economies and you can participate in this economic expansion through international mutual funds.

However, international investing comes with risks not inherent to domestic markets. Currency fluctuations can influence the value of your investments, like when a weakening foreign currency reduces the value of your holdings when converted back to USD or Euros. Political instability or economic downturns can also negatively affect the performance of your foreign investments. To mitigate these risks, you must diversify your investments across different countries, regions and industries.

10 Best International Mutual Funds

Here are the 10 best international mutual funds we’ve found in 2024:

1. Fidelity ZERO International Index Fund (FZILX)

FZILX is Fidelity's zero-expense-rate international mutual fund. The fund has over 2,000 stock holdings divided across various sectors, with the highest concentrations in finance, industrials and tech. The largest holdings are Taiwan Semiconductor Mfg, Novo Nordisk and Tencent Holdings.

Why We Picked It: Free is good, right? This fund is one of the only international stock mutual funds to be entirely expense-free, meaning all returns go back into your pocket. The fund is also diversified across multiple industries and regions.

2. Schwab International Index Fund (SWISX)

Charles Schwab clients can buy and sell this fund for free, although it does have a tiny 0.06% expense ratio. It also has nearly $10 billion in assets under management and a narrower group of holdings (747 total) than Fidelity’s free international index fund.

Why We Picked It: Schwab’s fund has a 0.06% expense rate, higher than zero, but still very competitive in the international fund space. It also has a different low-turnover stock concentration, with Novo Nordisk, ASML and Nestle composing the top three holdings.

3. Vanguard FTSE All-World ex-US Index Fund (VFWAX)

Vanguard is no longer the only low-cost fund provider, but its offerings remain impressive. VFWAX excludes the United States from its strategy and invests in developed and emerging markets outside U.S. borders.

Why We Picked It: This fund has extremely low turnover despite its diverse holdings, making it more tax-efficient than most mutual funds. The expense ratio is reasonable and the fund has nearly $60 billion in net assets.

4. Fidelity Emerging Markets Index Fund (FPADX)

Emerging markets are always riskier than developed ones due to volatile economies or (in the case of China) governments keeping their fingers on the scales. FPADX is Fidelity’s fund for growing international economies, focusing heavily on China, India and Taiwan.

Why We Picked It: If you want to invest in emerging markets, you need an affordable and diverse fund to manage risk and FPADX has a very low 0.075% expense rate and over 1,300 stocks in its portfolio.

5. Vanguard Global Minimum Volatility Fund (VMVFX)

High volatility is one of the primary reasons investors avoid international stocks, so this Vanguard fund is ideal for those who want foreign exposure without feeling like they’re on a roller coaster. VMVFX is a global blend of U.S. and international stocks designed to reduce volatility compared to overall global indexes.

Why We Picked It: VMVFX combines low-volatility international stocks with blue-chip U.S. stocks like Lockheed Martin and Church & Dwight. The fund holds a higher percentage of foreign equities than a traditional global blend and the 0.21% expense rate is low for this type of exposure. 

6. Schwab Fundamental International Equity Index Fund (SFNNX)

This fund focuses on highly liquid stocks in international markets, using factors like sales, operating cash flow and buybacks and dividends to measure and select companies for its portfolio. These companies tend to be dividend-paying stocks like financials, industrials or consumer product makers.

Why We Picked It: SFNNX has a low concentration of holdings at the top (the largest component is under 2.5% of assets) and focuses on areas with stable economies and governments, such as Japan and the United Kingdom. It also has low portfolio turnover and a modest expense rate.

7. Vanguard International Explorer Fund (VINEX)

Small- and mid-cap international investing can be risky, but less so than emerging markets funds since small companies can still thrive in stable economies. VINEX uses advisors to identify stocks with high growth potential based on valuation and competitive advantage.

Why We Picked It: Exposure to small- and mid-cap international stocks is often expensive, but VINEX’s 0.52% expense rate is the lowest among fund providers. The fund is well-diversified across regions and industries.

8. Northern Global Sustainability Index Fund (NSRIX)

If sustainable investing is on your fund checklist, NSRIX tracks an index of domestic and international companies that meet specific Environmental, Social and Governance (ESG) standards.

Why We Picked It: NSRIX has a high concentration of US-based stocks (over 70%), which may cause some investors to scoff at the 0.3% expense rate. However, the fund has outperformed most of its global large-blend peers over the last 10 years and the international components are diversified across borders and sectors.

9. Schwab Fundamental Global Real Estate Fund (SFREX)

Now, we’re getting into more tailored funds and strategies and global real estate certainly isn’t for the faint of heart. SFREX invests in international real estate companies with low volatility and has over $800 million in assets.

Why We Picked It: SFREX is one of the few international real estate funds with most of its holdings outside the United States (only 49% domestic). The fund’s holdings are spread across emerging and developed nations in Europe and Asia and the 0.39% expense rate is low for a mutual fund with these objectives.

10. AQR International Multi-Style Fund (QICLX)

QICLX is an actively managed large-value fund from aggressive hedge fund AQR. Long-term capital appreciation is the goal and the fund invests in assets like stocks, equity ETFs, futures contracts, index swaps and REITs to meet its objectives.

Why We Picked It: The fund has complex strategies and high investment minimums. However, its returns and modest expense ratio make it an intriguing choice for high-net-worth investors who want alpha in an affordable package.

Choosing the Right International Mutual Funds

Before diving into specific funds, define your investment objectives. Are you seeking long-term growth, income or a balance of both? These goals will influence the type of international fund you choose. Remember, the best-performing international mutual funds might not always be the right fit for your portfolio.

Be sure to consider the following factors when choosing international mutual funds:

• Geographical Thesis - Are you investing in broad global funds or region-specific funds, like Europe or Asia? Funds are often categorized by market size (emerging vs. developed), focus areas (global vs. regional vs. specific country) and company size (small-cap vs. large-cap).
• Fund Performance - While past performance doesn’t predict future results, it can provide valuable insights. Look at a fund’s returns relative to market averages, turnover rate and risk level for a better understanding of its performance.
• Management Style - Don’t just compare active vs. passive management. Consider factors like fees and turnover, which can influence capital gains distributions. If a fund charges higher fees than competitors and is underperforming, it may be one to avoid.

Why Should You Invest in International Mutual Funds?

Thinking about investing abroad? Adding international stock mutual funds to your portfolio has three distinct benefits:

Enhanced Diversification

International mutual funds invest in companies worldwide, spreading risk across different countries, regions and sectors. This diversification reduces the impact of a recession or war in a single region. Investing in multiple markets can offset losses in one area with gains in another. This helps stabilize returns over time, making international mutual funds a valuable tool for long-term investors.

Access to High-Growth Opportunities

Investors gain access to emerging markets and high-growth economies that may not be available through domestic funds. Emerging economies often have rapidly expanding markets, offering the potential for higher returns. International growth mutual funds can tap into opportunities in sectors like technology, health care and renewable energy thriving outside your home borders.

Risk Mitigation

Investing in different markets and currencies protects your portfolio from the negative impacts of a domestic market downturn. Global investments act as a balance to your portfolio. During economic uncertainty, some markets may perform well while others struggle. By diversifying internationally, you can offset losses in one market with gains in another. This approach can help stabilize your overall returns and reduce the impact of market volatility.

International Mutual Funds: Are They Right For You?

Consider your goals and risk tolerance to determine if international mutual funds suit you. These funds offer global diversification and access to high-growth markets but also come with unique risks like currency fluctuations and geopolitical instability that can impact performance. Before investing, assess your long-term objectives. Are you comfortable with potential volatility? International funds might fit if you're seeking long-term growth and can tolerate fluctuations. However, you may want to explore other options if you prefer a more conservative approach.

International Mutual Funds Have Growth Potential, But Risks You Won’t Find at Home

Buying a top international mutual fund is a good way to diversify against home bias, but you must select one that works for your portfolio. U.S. stockholders don’t need to worry about certain instabilities that investors in other countries must consider. Consult with an advisor and ensure international holdings make sense for your investment plans.

Frequently Asked Questions