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No. of Recommendations: 3
My favorite international stock ETFs are DFJ, DGS, MOTI, DGRE, IQIN, FNDC, and GWX.

MOTI is the international moat fund. Its portfolio contains the kinds of stocks that justify higher multiples, yet sells for only 111% of book value (according to Morningstar).

DGRE is the emerging markets dividend growth fund. Its portfolio contains the kinds of stocks that justify higher multiples but sells for only 198% of book value. Out of my favorite international stock ETFs, this one has been the best-performing so far. DGRW is the US version of this fund (and comes from the same fund company), yet sells for 491% of book value. That's nearly two-and-a-half times more expensive.

All the others are plain vanilla funds with good diversification. (The biggest position in each of these other funds is less than 2% of the portfolio.) DFJ has dividend-paying small-cap Japanese stocks and sells for just 76% of book value. The other four funds are all just slightly above book value. DGS applies the small cap dividend strategy to emerging markets. IQIN has large cap developed market stocks. I like to think of it as analogous to the S&P 500 but with less concentration in the biggest positions. FNDC and GWX have small cap developed market stocks.

dwerme, your top international pick (VXUS) sells for 163% of book value and has 1.57% of its portfolio in its largest position. I'm not crazy about it, but it's still far better (in my opinion) than VTI or VOO. I don't own any of Vanguard's international stock ETFs, but if I had to choose one, I'd pick VSS. It's a small-cap fund at 136% of book value and just 0.43% of the portfolio in its biggest position.

For money market funds and bond funds, a rock-bottom expense ratio is essential, because there is no chance of hitting the jackpot. For stock funds, I'm willing to pay a higher (albeit still reasonable) expense ratio to get a strategy that I cannot get elsewhere. That's why none of my favorite international stock ETFs are from Vanguard. The international fund universe has far fewer choices than the US stock universe (especially at Vanguard), and the limited competition for investor dollars is part of the reason the expense ratios are higher. In other words, beggars can't be choosers.
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