Global Equity Investing: ETF Alternatives to Vanguard's VT   

SPDR Portfolio MSCI Global Stock Market ETF (

SPGM

-2.13%

)

SPGM hails from State Street Global Advisors' "Portfolio" series of ETFs, which as their name suggests are intended as low-cost core building blocks in a portfolio. SPGM is their globally diversified offering, tracking the MSCI ACWI IMI Index for a 0.09% expense ratio. Compared to VT, SPGM differs by using a MSCI instead of a FTSE index, and also has fewer holdings.

Still, the market-cap weighted nature of both indexes means that historically, SPGM has performed very similarly to VT. Over the trailing 10 years as of April 30th, 2023, SPGM has returned an annualized 8.53%, whereas VT returned 8.11%. The discrepancy in performance can be attributed to SPGM's higher weighting in large-cap stocks due to the MSCI indexes' methodology.

iShares Global 100 ETF (

IOO

-1.77%

)

What if you wanted to just track the 100 largest global equities? The solution here is IOO, which tracks the S&P Global 100 Index. This ETF is fairly long-lived, having been around since December 2000 and has attracted just over $3.7 billion in AUM. However, it is significantly pricier than VT and SPGM at 0.40%. Still, not many ETFs offer the same global mega-cap exposure as IOO does.

Currently, IOO's portfolio is skewed towards the U.S. at 71.70% due to the concentration of mega-cap stocks there. Another consequence of this is a higher weighting towards the technology sector at 31.15%. Unsurprisingly, IOO has outperformed both VT and SPGM over the trailing 10 years, returning an annualized 10.12% thanks to U.S. large-cap tech growth.

iShares MSCI World ETF (

URTH

-1.85%

)

Emerging market equities (countries like China, Brazil, and India) currently comprise around 10% of the global market, but not every investor likes them. For example, consider the plight of Russian equities last year during the invasion of Ukraine, which saw numerous country-specific ETFs shut down. Or the decimation of Chinese education technology stocks after the country cracked down on the industry.

For those looking to invest internationally with a single ticker, but avoid emerging market stocks, the ETF to consider is URTH. This ETF tracks the MSCI World Index, which only holds U.S. and developed market equities in an approximate 67% U.S. and 33% international developed allocation. It also charges a fairly reasonable expense ratio of 0.24%.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.