Prediction: This Overlooked International ETF Will Outperform the S&P 500 Over the Next 20 Years
Global stocks could be starting a long-term trend of outperforming the U.S. market.
The U.S. stock market has been thriving for a prolonged period, leading many Americans to believe that investing solely in American companies is sufficient. However, this perspective may be misguided. According to Vanguard's latest research, as of June 30, international stocks outside the U.S. (not hedged) are anticipated to outperform U.S. stocks over the next 30 years.
According to the Vanguard Capital Markets Model®, global stocks are expected to generate annualized returns ranging from 5.9% to 7.9%. This is projected to be 1.2% to 2.2% higher annually compared to the model's anticipated average return for U.S. stocks over the same period, which is estimated to be between 4.7% and 6.7%. While there is no assurance that Vanguard's prediction holds true, if one aligns with the general direction of this forecast, the Vanguard Total International Stock ETF (NASDAQ: VXUS) might present an attractive investment opportunity at present.
This particular international ETF has generated a total return of 26.7% over the past year, surpassing the performance of the American large-cap S&P 500 index (SNPINDEX: ^GSPC).
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