This Global ETF Could Beat U.S. Tech Stocks for 10 Years

One of the biggest stories of investing in 2026 is that international stocks are (mostly) beating the U.S. stock market. The Vanguard Total International Stock ETF (NASDAQ: VXUS), which holds more than 8,000 stocks from countries outside the U.S., has gained 7.6% year to date. That’s better than the S&P 500 index (which is up only 4.2%), and about on par with the tech-heavy Nasdaq-100 index.

After more than 15 years when U.S. tech stocks were some of the best investments in the world, is it time for global stocks to take their place in the spotlight? One of the leading investment companies’ research teams says yes. The Vanguard 2026 economic and market outlook predicts that global stocks could be a good buy for the next several years — better than U.S. tech stocks.

Let’s take a closer look at this trend and see which global stock ETF might be the best choice to outperform the U.S. tech sector for years to come.

Vanguard research: international stocks are poised to outperform

Major tech companies are spending hundreds of billions of dollars on artificial intelligence (AI) capex, which has led some investors to worry that U.S. stock valuations are overstretched. Remember that the U.S. market isn’t the only game in town.

The Vanguard 2026 economic and market outlook projects that “ex-U.S. equities” (international stocks) will deliver 4.9%-6.9% average annual returns for the next 10 years. Expectations are much lower for U.S. stocks, which Vanguard projects to deliver 4%-5% average annual returns.

Vanguard’s research said that when looking at U.S. tech stocks, “risks are growing amid this exuberance,” and “more compelling investment opportunities are emerging elsewhere.” The report said that non-U.S. developed-market equities had one of the strongest risk-reward profiles for the next five to 10 years.

How to buy international stocks

Vanguard’s research didn’t recommend any specific stock ETFs to fit this investing strategy. But if you want to buy developed-market stocks from outside the U.S., one easy way to do that is to invest in the Vanguard International High Dividend Yield ETF (NASDAQ: VYMI). For most of 2026, this fund has outperformed the S&P 500 and the Nasdaq-100.

This international ETF gives you exposure to 1,597 stocks from developed-market economies — that includes countries like Japan, the United Kingdom, Canada, and Switzerland. The stocks in this fund are forecasted to deliver higher-than-average dividend yields, and the fund’s dividend yield is 3.64%. If you think U.S. growth stocks are overpriced, this ETF’s price to earnings ratio of 13.6 is much cheaper than the 34.95 P/E ratio of the Nasdaq-100.

For the past 10 years since the fund’s inception, the Vanguard International High Dividend Yield ETF has delivered average annual returns (by net asset value) of 10.9% per year. That’s not much better than the long-term average return of the S&P 500.

But more recently, this fund of high-dividend global stocks has paid off at much higher level, delivering 20.4% average annual returns for the past three years, and a 33.1% return in the past year. And it charges a low expense ratio of 0.07%.

There’s no guarantee that the recent outperformance of international stocks will continue for long. But if Vanguard’s predictions are accurate, diversifying your portfolio away from U.S. tech stocks could be a smart move.

Should you buy stock in Vanguard International High Dividend Yield ETF right now?

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Ben Gran has positions in Vanguard Total International Stock ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

VYMI: This Global ETF Could Beat U.S. Tech Stocks for 10 Years was originally published by The Motley Fool