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A Foreign Large-Blend Fund With a Cost Advantage

Silver-rated Schwab International Index is among the best diversified portfolios in its category.


Daniel Sotiroff: Silver-rated Schwab International Index is a great fund for investors seeking a diversified portfolio of foreign stocks. This fund tracks the MSCI EAFE Index, which includes large- and mid-cap stocks listed in 21 developed markets in Europe, Asia, and Australia. It holds over 900 stocks, and its top 10 holdings represent less than 11% of assets, making it one of the best diversified portfolios in the foreign large-blend Morningstar Category. 

This fund uses a market-cap weighted approach that helps reduce turnover and the associated transaction costs. This also skews the portfolio toward stocks from the eurozone, Japan, and the U.K. Japanese stocks represent the largest country weighting at about 24% of assets. The portfolio's sector and country allocations are similar to the typical fund in this category. However, unlike many of its peers, the fund excludes stocks from Canada and South Korea.

Daniel Sotiroff does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.