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.
Overview
The U.S. stock market has been doing so well for so long that many Americans assume that they only need to buy stocks in American companies. That might be a big mistake. According to Vanguard's latest research as of June 30, international stocks outside the U.S. (unhedged) are expected to outperform U.S. stocks for the next 30 years.
Over this long-term time frame, the Vanguard Capital Markets Model® expects global stocks to deliver annualized returns of 5.9% to 7.9%. That is 1.2% to 2.2% higher per year than the model's expected average annual return for U.S. stocks in the next 30 years: 4.7% to 6.7%.
Details
There's no guarantee that Vanguard's estimate is correct. But if you agree with the general direction of Vanguard's forecast, the Vanguard Total International Stock ETF (NASDAQ: VXUS) could be a good buy today. This international ETF has delivered a total return of 26.7% over the past year, outperforming America's large-cap S&P 500 index (SNPINDEX: ^GSPC).
Source
Originally published at www.fool.com.