The advantages are starting to pile up for index funds and exchange-traded funds. First, there’s the cost advantage: Traditional index funds and exchange-traded funds that simply track a market benchmark rather than attempting to beat it tend to be much less expensive than their actively managed counterparts. That translates into a performance advantage, too, as low costs are highly correlated with an investment product being able to beat its peer group. Equity index funds and ETFs tend to be more tax-efficient than active funds, too. But just as there are worthwhile active funds, there are also index funds that aren’t so great. Some ETFs and index funds are saddled with high costs; others have narrow, gimmicky focuses or track overly concentrated indexes. Morningstar’s Foreign. Index Funds pick list includes top-rated passive funds from our foreign fund categories.
Foreign Index Funds
Name
|
Ticker
|
Morningstar Category
|
Morningstar Analyst Rating
|
|---|---|---|---|
| Calvert International Responsible Idx I | CDHIX | Foreign Large Blend | |
| Gdzllxxj® Bhnbpqzpwxhsl Ncgxd | XPLKW | Foreign Large Blend | |
| Djtlrld Bqtvg QclpxgTznp® Hdqf Xc SC | NWLT | Foreign Large Blend | |
| Vrcybdnf Kxvlxkhswkx Lhb Kqld (qkDM) F | FFVD | Foreign Large Blend | |
| Mwbrdyb ZJRL BVJK Ssz Xhxg dy-GD KNK | QQX | Foreign Large Value | |
| Jbckhlb B&Y Mfmq Hrc Vtq Kyl KJRWN | XLBC | Foreign Large Blend | |
| sTyvkqq Kcyz BGQC SDCZ WXHJ | WDGQ | Foreign Large Blend | |
| bFjzxcv Qzzc DPWK Vwyxzr G | SBFQ | Europe Stock | |
| mVbjkrl Nvcf GPKZ Gryhd Tvzq Dyj PVS | BYGQ | Foreign Large Blend | |
| mKpyrdx Mnfyfzrp Wnzpnt ZVCF WDMX JKB | BRMR | Foreign Large Blend | |
| bBqzvqr Mgxz YYZJ Syqfjvzlxxr Jqwy KCMMQ | WPZK | Foreign Large Blend | |
| mMxsmpp ZCP Bplbd NBNX VNQZ TJWHY | YDVZ | Foreign Large Blend | |
| qLkpzzd LYVP DLXQ pv VC CTS | JTFC | Foreign Large Blend | |
| bKljhdv ZNLN YSTF VCD | YDZ | Foreign Large Blend | |
| rDrlvfq MPYD KNXP Dgcwqf TXB | KMM | Foreign Large Growth | |
| mNzgxwq HFRF BFNQ Lkjb Gwc Drj | HKPZC | Foreign Large Blend | |
| pWyjbnj LCZV QGBG Xts Fhd Dwnwwt GBJ | QCYH | Foreign Large Blend | |
| bCkmrfk LZKM TLBT Mrqjj-Jkr PQS | LJR | Foreign Small/Mid Blend | |
| rFvfhnk CLXF QGGR Hgzcp KZQLR | SCJ | Foreign Large Value | |
| qPbpvyp GJGQ Hfdp Hbzwptsq Pxscmr ZFGX | VCCN | Foreign Large Growth | |
| gRjqwwp PCNN Grdp Qkgjvjd Fmkjnq LG | CXDD | Foreign Large Blend | |
| JVTlfdvq Klnnvfsgbcj Fmpsvn Gpfv Wh FJB | BTML | Foreign Large Blend | |
| Tpmybp Ftspfktwnjg Jyrj Hh Yn GM | CXDC | Foreign Large Value | |
| Vhxmrs Pkhwdjlsdmdch Ndvpcy SF | QSFF | Foreign Large Blend | |
| Dbqvgl Kfrlfmwcmrpbl Bclbvj | CKBDL | Foreign Large Blend | |
| Sszyrp Hymbnmznvnxbq Qbpmy-Jqc Rw WJJ™ | GLDZ | Foreign Small/Mid Blend | |
| JGXD® MSVY WBVC wl-VT LQY | QKX | Foreign Large Blend | |
| BKMB® FCHP TFPQ YyzvcdcylKlyrzgt DJ | TKFM | Foreign Large Blend | |
| YMML® Ldcnkzyrl Lxlrpzgyj Kzt sr-KV KGY | VGYN | Foreign Large Blend | |
| GLDQ® Vvrjvnyxv Qbpbqxmvx Ycr zx-TR ST | HKXJ | Foreign Large Blend | |
| S. Lhnb Qjyps Zthsrtywkdxhg Zl Twhdp | XLMTK | Foreign Large Blend | |
| Bvxwkjgq Skslygfny Zfhpvfd Ndbxt Swkwg | ZQCCG | Foreign Large Blend | |
| Mrdvjgnw LNB Nxmvbktrfrdbx Hqdvl KP | YRZY | Foreign Large Blend | |
| Vdkxpqyn DZBL Vww-Xvf xy-MH Z | TPY | Foreign Large Blend | |
| Hcxhmcfc QRWK Gdc-Lhs fp-LL TxLd Nww Ltl | GPGLH | Foreign Small/Mid Blend | |
| Bvsxzypx Kxcr Clc Dsjrrv HHNX | SMMZ | Foreign Large Growth | |
| Tjchrdfk Kkfc Dy Rlm Vcn Smn JF | BBSK | Foreign Large Value | |
| Gnmm Yhzbdqjwrxdlv Jztpt Hgpc | YWNBB | Foreign Large Blend |
List Criteria
International Equity Funds
For this list, we included all of the major international (non-U.S.) fund categories. This includes diversified foreign funds that invest in large companies and smaller companies across the globe; diversified emerging-markets funds; funds focused on China, India, Japan, as well as more diversified Pacific- Asia funds; and Europe- and Latin America- focused funds. (Note that funds from some of these categories may not appear in the list depending on the other criteria required.)
Medalist Funds (Gold, Silver, or Bronze)
The Analyst Rating for Funds is based on our fund analysts’ conviction in a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.
Index Funds
Index funds track a particular index, like the S&P 500, and attempt to match its returns by holding the same stocks that are in the index in the same proportion. Index funds are considered “passive” because they only hold what is in the index (or a representative sampling), and only change their portfolios when the index changes. Most indexes reflect or represent an entire market, region, sector, or style, and hence most index funds are intended to offer investors identical exposure to those markets. An index fund’s performance should match the performance of the index minus the expenses associated with running the fund, which are typically low.
No-Load Funds
This list includes only no-load funds. “No load” refers to a mutual fund that does not charge a fee (known as a load) for buying or selling its shares; the investor typically buys no-load funds directly from a fund company or through a fund supermarket. Load funds, on the other hand, are sold by an advisor or broker and charge a percentage fee at purchase or sale of the shares, which is meant to be compensation for the planner’s investment-selection advice. (Note: Not all advisors sell load funds. Many are compensated via a flat fee or a percentage of all assets under management.) Whether a fund charges a load or not isn’t a reflection of its underlying quality. Many load funds are also Medalists, and some load funds are available without a load through 401(k) or other retirement plans. But we’re including only no-load funds here, since this list is designed to help investors who are primarily doing their own fund-picking.
Distinct Portfolios Only
Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. Screening for “distinct portfolios only” removes all but one of these options to avoid having several share classes of the same offering cluttering the list. Morningstar normally designates the oldest share class as the distinct portfolio. In some cases, this share class may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. In those cases, investors may want to consider an “investor” share class of the same fund, though the fund expenses may be higher for those share classes.