3 International ETFs That Could Outperform the S&P 500 This Year

While the S&P 500 has enjoyed a strong run fueled by U.S. tech giants, investors are increasingly looking overseas for potential outperformers in 2024. Many analysts suggest that valuations outside the U.S. are more attractive, offering compelling entry points in markets with improving fundamentals and supportive macroeconomic policies. This outlook shifts the spotlight to regions that have historically traded at a discount to American equities, presenting a ripe environment for active international diversification. Three ETFs stand out as strong contenders: The iShares MSCI Emerging Markets ETF (EEM) for its exposure to economies with robust growth prospects and favorable demographics; the Vanguard FTSE Developed Markets ETF (VEA) for its broad, diversified access to mature non-U.S. economies, often benefitting from a weaker dollar; and the Franklin FTSE India ETF (FLIN) which targets the rapidly expanding Indian market, driven by domestic consumption and government infrastructure initiatives. Each of these offers a unique risk-reward profile, leveraging different global economic cycles. For investors, the key takeaway is that relying solely on U.S. large-cap growth may limit potential returns this year. Allocating a portion of a portfolio to these international ETFs could capture growth in diverse geographies, providing a crucial hedge against potential domestic market volatility. Investors should closely monitor Q2 earnings reports and central bank stances in these regions, as these will likely serve as the next significant catalysts.