2 International ETFs That are Crushing the VOO and are Worth Buying for 2026

If you haven’t thought about diversifying your equity portfolio internationally, perhaps the performance of non-U.S. financial markets might have you looking beyond the S&P 500 for your next big investment. Undoubtedly, the S&P has done just fine, now up over 15%, with a potential move to the 7,000 level in sight if investors can shrug off recent concerns that have made for a rather rocky ride in this fourth and final quarter of 2025.

In a prior piece, I highlighted that chasing returns in outperforming ETFs was less likely to be a winning strategy. That said, for long-term thinkers who’ve recognized a portfolio blind spot (no international diversification), it might make sense to think about adding to some ex-U.S. ETFs that might have what it takes to outrun the U.S. market indices over the next decade or so.

Whether international stocks are key to keeping the 10% or more in gains coming in as U.S. stock valuations creep higher is the big question.

Beating the market hasn’t been hard in 2025 if you were internationally diversified

Though various international markets (think the ones up more than 50% on the year) have now gotten pricier, closing the valuation gap with the U.S., I do think expanding one’s international horizons isn’t all too bad an idea, especially if you can take advantage of the individual names that still offer ample value.

Of course, not everyone’s brokerage will have access to a wide range of international markets. And that’s where ETFs come into play. Arguably, they’re the best (and cheapest) way for American investors to gain exposure to markets that might trade very differently from the S&P 500. Indeed, there’s always the risk that international markets start to underperform the U.S. markets again.

Either way, stashing them on a radar with the intent of buying on a dip might be the way to go, as various pundits, including Vanguard, look to value and non-U.S. developed markets as places to invest over the next 10 years.

Vanguard FTSE Developed Markets ETF

The Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA) is one of the largest and most popular international ETFs out there. It gets the job done well (more than 3,800 stocks in the basket) and at a very low price (0.03% expense ratio).

Of course, the Vanguard FTSE Developed Markets ETF is quite heavily weighted towards Europe, which accounts for more than half of the exposure. And with a developed markets focus, investors would pretty much be heeding Vanguard’s advice for the next five to 10 years when it comes to investing beyond the U.S. market.

Undoubtedly, just about everyone, it seems, is convinced that the U.S. stock market is frothy and overdue for a plunge at some point, probably once an AI bubble (if it even is one at this point) bursts. Though no international ETF is immune from getting pulled down as well, I do think a name like the Vanguard FTSE Developed Markets ETF is better able to recover and move on should such an international financial market upset occur.

With an average 17.1 times trailing price-to-earnings (P/E) and a 2.73% yield, the Vanguard FTSE Developed Markets ETF is cheaper and more bountiful. And it’s been a faster gainer this year, with shares now up 31%, around double that of the S&P 500 (up 15.7% YTD).

iShares MSCI EAFE Value ETF

If you’re looking for more of a tilt towards value in developed markets, the iShares MSCI EAFE Value ETF (NYSEARCA:EFV) might be an even better bet, especially if you subscribe to the belief that value and ex-U.S. stocks will outperform in the long run.

I’m a huge fan of value factor ETFs, and the iShares MSCI EAFE Value ETF is no exception. The Morningstar gold medalist-rated ETF invests across Europe, Australia, Asia, and the Far East (EAFE) and boasts a competitive 0.31% expense ratio. The trailing P/E multiple is also at an incredibly low 14.5 times, making it one of the deeper value ETFs out there, while the yield sits at close to 3.3%.

Year to date, the ETF has crushed the S&P, delivering just shy of 35% in gains. Indeed, the value aspect seems to offer a little extra in this environment. And if you’re looking for a return of value stocks, I think the iShares MSCI EAFE Value ETF is a terrific bet.