Yes, it has been a great year for U.S. equities, especially compared with the rest of the world. The S&P 500 is up 22% for the year-to-date, a performance that lags only Japan’s Nikkei and the U.K.’s FTSE 100 among the word’s major indices.
Unfortunately, those robust gains have left U.S. stocks looking fairly valued at best — and uncomfortably pricey at worst. That’s why a trip into international ETFs might be the most prudent measure right now.
Market strategists at BlackRock (BLK) recommend clients take some money out of their U.S. positions and reallocate it to foreign developed and emerging markets. With much of the rest of the world’s bourses underperforming this year, there’s no shortage of overseas equities that are not only cheaper than the S&P 500, but offer much higher yields as well, BlackRock notes.
If you’re looking for ideas, we’ve got a few. We have picked the three most promising international ETFs where the markets are both cheaper than the S&P 500 and offer generous yields. (The yield on the S&P 500 currently stands at 1.9%.) Take a look: