Chapter 9

Going Global: ETFs without Borders

In This Chapter

arrow Understanding how global diversification lowers risk

arrow Calculating how much of your ETF portfolio to allocate overseas

arrow Deciding upon your investment destinations

arrow Choosing your best ETF options

arrow Knowing what to avoid and when to stay home

If you were standing on a ship in the middle of the ocean (doesn’t matter whether it’s the Atlantic or Pacific), and you looked up and squinted real hard, you might see investment dollars sailing overhead. For at least a decade now, U.S. fund investors have been steadily adding money to the international side of their stock portfolios. According to figures from the Investment Company Institute, the average U.S. investor in 2001 had but 13 percent of his or her equity portfolio allocated to foreign stocks; today, that figure is 27 percent.

Just to be clear: The terms foreign and international are used interchangeably to refer to stocks of companies outside of the United States. The word global ...

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