If it’s international markets you want, the iShares Core MSCI Total International Stock ETF (IXUS -0.51%) is a good way to go. The fund derives its holdings from an MSCI global index and subtracts the U.S. listings. It held 4,584 stocks in October 2026, including large-, mid-, and small-cap companies worldwide.
The ETF offers diversified international exposure. Its top five geographies were:
- Japan: 15.7% of the fund’s holdings
- Taiwan: 9.4%
- United Kingdom: 8.3%
- Canada: 8.1%
- South Korea: 6.8%
The iShares Core MSCI Total International Stock ETF has an attractive dividend yield of 2.9% based on the last 12 months of dividend payments (as of October 2026).
Tax considerations for ETFs
ETFs tend to be more tax-efficient compared to mutual funds. However, investors still need to consider taxes when holding an ETF in a regular brokerage account.
Investors will pay two types of taxes on ETFs that hold stocks or bonds:
- Taxes on income: ETFs that hold dividend-paying stocks must distribute the income from those dividends to investors at least once each year. The IRS taxes Qualified dividends at the lower federal long-term capital gains rates of 0%, 15%, or 20%, while taxing non-qualified dividends and interest income from bonds as ordinary income, up to 37%.
- Taxes on capital gains: If you sell an equity or bond ETF, you’ll pay taxes on the gain depending on how long you held the fund and your annual income. ETFs held for more than a year get taxed at the lower federal long-term capital gains rates of 0%, 15%, or 20%. Meanwhile, the IRS taxes funds held less than a year at the short-term capital gains rate, which is the same as your ordinary tax rate (up to 37%).
Types of ETFs
There are several types of ETFs that investors can buy, including:
- Broad index funds: Many of the largest ETFs track a broad market index, such as the S&P 500 or the Nasdaq-100. These funds enable investors to gain diversified market exposure through a single low-cost fund.
- Sector ETFs: These ETFs focus on stocks in a specific stock market sector, such as technology, energy, or healthcare.
- Asset-focused funds: These funds invest in a specific asset class, such as government bonds, dividend stocks, small-cap stocks, or commodities.
- Thematic ETFs: Thematic funds invest in themes such as semiconductor stocks, artificial intelligence (AI), international stocks, or clean energy.