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Consider This Prudent Approach to International Stocks

BY | ETF Database
7:50 am ET 07/23/26 | 14 VIEWS
International stocks are performing admirably this year. As of July 22, the MSCI ACWI ex-US Investable Market Index, which combines developed and emerging market equities, is higher by 11.51%. Sounds good and it is, but investors should dig deeper.Artificial intelligence (AI)-adjacent and technology stocks, many hailing from emerging markets, have been key contributors to international equity upside this year. As a result, markets such as South Korea and Taiwan loom large in some supposedly diverse international ETFs. Plus, some of those funds now devote significant percentages of their portfolios to growth stocks. For investors looking to defray some of those risks while adding more value exposure to their portfolios, the ALPS O’Shares International Developed Quality Dividend ETF (OEFA) is an idea to consider. With its emphasis on quality traits and dividend growth, OEFA could be an ideal complement to growth-heavy portfolios and for investors looking for a more prudent way to gain international exposure.OEFA Could Be a Credible DiversifierWith the S&P 500 heavily allocated to AI-related stocks and with the same becoming true of some developing markets, developed market exposure – attainable via OEFA – becomes all the more compelling because the sector-level profiles in many developed markets don’t resemble those found here in the U.S. “At the index level, developed-market equities outside the US bear less resemblance to the US market than their emerging counterparts,” noted Morningstar’s Dan Lefkovitz. “For one thing, they are a diffuse universe. For another, financial services is their largest sector.” As a diversification tool, OEFA merits consideration. None of its holdings command a weight in excess of 4.8% and the ETF provides exposure to stocks from 15 countries. Those traits may be worth embracing at a time when concentration is elevated in the U.S. “Concentration in the US market has continued to climb to new heights, especially over the past two years as the AI buildout boom sends AI-related stocks to new historical highs,” according to Morningstar. Likewise, OEFA is a style diversifier. Many domestic and emerging markets ETFs that were previously style diverse are now growth-heavy. That’s not the case with OEFA. The ALPS ETF devotes about 73% of its roster to industrial, consumer discretionary, healthcare and financial services stocks, confirming its value tendencies. For more news, information, and analysis, visit the ETF Building Blocks Content Hub. VettaFi LLC (“VettaFi”) is the index provider for OEFA, for which it receives an index licensing fee. However, OEFA is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of OEFA.

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