18 of the Best Stocks and ETFs to Buy Based on 2026 Expert Forecasts

There are a few things in life you can depend on. Unsolicited advice from your parents, for instance. Or being one sock short after washing a load of laundry. You can also rely on Morningstar Director of Personal Finance Christine Benz sharing the long-term stock and bond return forecasts of several highly respected investment firms—including BlackRock, J.P. Morgan, Morningstar Multi-Asset Research, Research Affiliates, Schwab, and Vanguard—each January.

Why does she engage in this annual ritual?

“Long-term return projections can be useful and are arguably even mission-critical in a financial planning context,” she argues. “Without some expectation of what market returns might be, it’s difficult to know how much to save, whether a retirement nest egg is adequate, or whether an in-retirement spending rate is too high. Long-term historical returns might fill that role, but at various points in time, such as early 2000 or early 2022, they might be unrealistically high.”

What are the pros expecting from the markets in the next several years? All the firms surveyed expect non-US stocks to outperform US stocks.

For those investors who’d like to increase their exposure to non-US stocks, here are Morningstar’s best international stocks and exchange-traded funds to buy.

10 of the Best Undervalued International Stocks to Buy

These 10 international companies from the Morningstar Global Markets ex-US Moat Focus Index look undervalued as of Jan. 15, 2026.

1. Taiwan Semiconductor Manufacturing TSM
2. Gildan Activewear GIL
3. Ambev ABEV
4. Yum China YUMC
5. Rogers Communications RCI
6. Sanofi SNY
7. Fresenius Medical Care FMS
8. Koninklijke Philips PHG
9. NetEase NTES
10. Tencent Holdings TCEHY

For those comfortable investing in individual stocks, Morningstar’s strategy for stock investing applies around the globe. First, favor companies with durable competitive advantages, or economic moats. These companies should be able to fend off competition and outearn their costs of capital for years to come. Then, buy these companies when their stocks are trading below what they’re worth—in our parlance, below our fair value estimates. We think undervalued stocks with economic moats make excellent long-term investments.

The Morningstar Global Markets ex-US Moat Focus Index is a quality-focused subset of the Morningstar Global Markets ex-US Index, a broad index representing 97% of the developed-market (excluding the United States) and emerging-market market capitalization. Morningstar ranks the wide- and narrow-moat stocks in the broad index by lowest price/fair value to find the 50 cheapest wide- and narrow-moat stocks. These stocks represent the most compelling values in the global moat universe.

8 Best International-Stock ETFs

For investors who would rather not pick individual stocks but instead own a basket of non-US stocks, several exchange-traded funds provide broad-based exposure to international stocks. Here’s Morningstar’s shortlist of the best international-stock ETFs: those ETFs that earn a Morningstar Medalist Rating of Gold with 100% analyst coverage. Ratings are as of Jan. 15, 2026.

1. Capital Group International Core Equity ETF CGIC
2. Capital Group New Geography Equity ETF CGNG
3. iShares Core MSCI Total International Stock ETF IXUS
4. iShares MSCI EAFE Value ETF EFV
5. Vanguard FTSE All-World ex-U. S. ETF VEU
6. Vanguard FTSE All-World ex-U. S. Small Cap ETF VSS
7. Vanguard International Dividend Appreciation ETF VIGI
8. Vanguard Total International Stock ETF VXUS

International Investing Strategies

ETFs can pursue different strategies when investing internationally. To wit: There are several different international Morningstar Categories represented on our Gold-rated list. Six of the best international ETFs on our list land in one of Morningstar’s large-cap foreign stock categories. Foreign large-cap funds tend to focus on Europe—specifically, established markets in France, Germany, Switzerland, the Netherlands, Spain, Italy, and the United Kingdom. They often hold significant positions in Asia, as well. And although they dabble in emerging-market stocks, they often limit their exposure to those markets to about 15% of assets.

Then there are investing strategies focusing on foreign small/mid-cap stocks; these ETFs often carry higher emerging-market positions. Other strategies may invest exclusively in emerging-market stocks or particular regions.

As is always the case, read an ETF’s Analyst Report for a better sense of what regions it invests in, what size companies it favors, and so on. Knowing how an ETF’s portfolio diverges from the average allows for better performance expectations—and better investor outcomes. For instance, emerging-market stocks tend to be more volatile than developed-market stocks. As a result, international-stock ETFs with higher emerging-market stakes will exhibit performance very different from their peers when emerging markets soar or sink.

Is International Investing a Good Idea?

Just because top investment firms forecast non-US stocks to outperform, is that reason enough for you to dip a toe into international waters? It may be, if your portfolio currently lacks exposure to international stocks.

“Because international stocks make up a significant portion of the available equity market, it makes sense for most investors to have some exposure to international stocks,” says Morningstar portfolio strategist Amy Arnott. How much is up to you: Arnott points out that non-US stocks comprise 37% of global market capitalization, as a reference point.

The Benefits of International Investing

International stocks can provide two primary benefits to a US-heavy portfolio.

For starters, non-US stocks can provide diversification. “In the past, non-US stocks have had relatively low correlations with their US stock counterparts, leading to better risk-adjusted returns for a globally diversified portfolio,” says Arnott. “As the economy has become increasingly global, though, US and non-US stocks have started moving more in tandem over the past couple of decades.” Still, non-US stock markets are less tied to technology and the artificial intelligence trade that’s driven so much of the return of the US stock market; international stocks provide diversification away from the trend.

International stocks also offer the potential to perform better than US stocks, just as they did in 2025. “There have been certain periods, such as the early 1970s, late 1980s, and 2002 through mid-2008, when international stocks have fared better than their US counterparts,” explains Arnott. “These periods often correspond to periods when the US dollar was weak: Stronger non-US currencies mean that investors in international stocks come out ahead when their returns are translated back to US dollars.”

The Risks of International Investing

Of course, investing in international stocks entails risk, including things like currency movements, political conflicts, and weaker accounting standards.

Perhaps more importantly, when international stocks fall, they can fall hard. “Historically, international stocks have lost as much as 50% or more during market drawdowns, such as the global financial crisis that started in late 2007 and the coronavirus-driven bear market in early 2020,” says Arnott. Still, because international stocks go up more often than they go down, they can generate solid risk-adjusted performance over the long term.

How to Find More of the Best International Stocks and ETFs to Buy

Investors who’d like to find more international stocks and ETFs to consider can do a few different things.

• Download all the international stock holdings from the Morningstar Global Markets ex-US Moat Focus Index’s holdings page. Remember, the index focuses exclusively on undervalued non-US stocks with wide or narrow Morningstar Economic Moat Ratings.
• Expand your search to include highly rated mutual funds, too. You’ll find some of Morningstar’s top-rated international-stock mutual funds on our Savvy International Travelers list.