Should You Look Abroad? Global Equity ETFs to Consider

Economic Landscape - The current economic environment presents heightened uncertainty for investors, driven by concerns over AI bubbles, overvalued U.S. asset prices, and ongoing economic and geopolitical tensions [1] Investment Strategies - Broadening exposure to global equities is recommended as a strategy, with the S&P World Index gaining 16.39% over the past year and 0.91% quarter to date, outperforming the S&P 500 [2] Investor Sentiment - U.S. equity funds experienced a slowdown in demand, with only $1.15 billion added in the week ending Nov. 12, marking the weakest weekly net inflow since mid-October [3][4] - Inflows into U.S. large-cap funds dropped sharply to $2.35 billion from $11.91 billion the previous week, indicating a shift in investor sentiment [4] AI Bubble Concerns - There are growing concerns on Wall Street regarding a potential bubble in the AI sector, with fears that excessive capital inflow may obscure future revenue and profit visibility [5] Sector Exposure - Portfolios heavily invested in U.S. market indexes like the S&P 500 are significantly exposed to the information technology sector, particularly the "Magnificent 7" tech leaders [6] - Approximately 36% of the S&P 500 is allocated to information technology, highlighting the importance of managing concentration risk and ensuring diversification [7] International Equity ETFs - Adding international equity ETFs can enhance geographical exposure and improve overall diversification, with specific ETFs like Schwab Fundamental International Equity ETF (FNDF) and Dimensional International Core Equity Market ETF (DFAI) showing significant exposure to Japan, the U.K., and Canada [8][9] Dividend-Focused Funds - Global dividend-focused funds are recommended for reliable income during market volatility, with options like WisdomTree International Hedged Quality Dividend Growth Fund (IHDG) and Vanguard International Dividend Appreciation ETF (VIGI) offering attractive dividend yields [11][12] Emerging Market ETFs - Emerging market ETFs present opportunities for higher returns, with inflows of $2.17 billion in the week ending Nov. 12, marking a third consecutive week of additions [13] - The Dow Jones Emerging Markets Index has gained 21.05% over the past year and 1.05% quarter to date, indicating strong performance [13]