5 Top-Performing International Equity Funds

International equity funds provide geographical diversification to portfolios and can widen an investor’s opportunity set. To screen for the top-performing ETFs in this category, we looked for those with the best returns over the last one-, three-, and five-year periods. Among the ranks, BlackRock’s iShares offerings stood out, taking up two of the five spots. All names that passed the screen were

that earn Morningstar’s gold medalist rating.

1. BMO MSCI EAFE Index ETF ZEA
2. iShares Core MSCI EAFE IMI Index ETF XEF
3. iShares ESG Aware MSCI EAFE Index ETF XSEA
4. Vanguard FTSE Developed All Cap ex North Amer Idx ETF VIU
5. Vanguard FTSE Developed All Cap ex US Index ETF VDU

International Equity Fund Performance

Over the past 12 months, the average fund in the international equity Morningstar Category returned 17.69%. On an annualized basis, international equity funds have climbed 14.22% over the past three years and gained 8.21% over the past five years. Meanwhile, the Morningstar Canada Index has risen 31.51% over the past 12 months, gained 24.00% per year over the past three years, and gained 15.47% per year over the past five.

What Are International Equity Funds?

Funds in the international equity category must invest at least 90% of their equity assets in countries other than Canada and the US and at least 70% of their equity assets in developed countries, according to the Canadian Investment Funds Standards Committee. Funds that do not meet any of the requirements of the more focused geographic equity categories and that invest less than 90% of their assets in any single country or region will be assigned to the international equity category.

Screening for the Top-Performing International Equity Funds

To find the best international equity funds, we looked at return data from the past one, three, and five years, using data available in Morningstar Direct. We screened for Canada-domiciled open-end and exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for those periods. We also filtered for funds with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded funds with assets under C$100 million and analyst coverage that was not 100%. This left five investments.

BMO MSCI EAFE Index ETF

• Ticker: ZEA
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

Over the past 12 months, the BMO fund rose 22.87%, while the average fund in its category rose 17.69%. The fund, which launched in February 2014, has climbed 17.41% over the past three years and gained 11.21% over the past five years.

BMO MSCI EAFE funds provide market-cap-weighted portfolios of large- and mid-cap stocks in the developed international market. Their representative portfolios and low turnover make them compelling options.

The funds track the MSCI EAFE Index. It targets large- and mid-cap stocks from 21 overseas developed markets, encompassing 85% of the investable market. The index weights its holdings by market capitalization. Market-cap weighting is an efficient way to size holdings because it harnesses the market’s consensus opinion of each stock’s relative value. Stocks that perform well take up a larger share of the portfolio, while shrinking companies that may be struggling will have less importance.

Diversification is a strength of this strategy. The index holds about 700 names as of September 2025, and that figure has been trending lower in recent years. The index’s 10 largest positions usually account for less than 15% of the portfolio. The strategy is not as broad as other index-tracking funds that include the small-cap segment, but it still covers a lot of ground and reasonably represents the opportunity set available to active managers. Sector and country allocations approximate the average fund in the international equity Morningstar Category.

The index does not include emerging-market and small-cap stocks, so it is not positioned to reap the rewards should they perform well. However, the impact on category-relative performance should not be huge. Taken together, they usually constitute around less than 10% of competitor portfolios in the international equity category. Middling performance in those segments gave these funds a small leg up on competitors in recent years.

This strategy is shared among several exchange-traded funds and mutual funds. ETFs tend to have lower fees than mutual funds, and this holds true with BMO MSCI EAFE funds. ETF fees usually rank in the cheapest quartile. Their mutual fund counterparts, however, have higher fees depending on the share class. Some rank in the cheapest quartile, while others land in more expensive quartiles. Investors should be aware of fees as they will have a direct impact on category-relative performance.

iShares Core MSCI EAFE IMI Index ETF

• Ticker: XEF
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

The C$22.6 billion fund has climbed 22.36% over the past 12 months, outperforming the average fund in its category, which rose 17.69%. The BlackRock fund, which launched in April 2013, has climbed 17.47% over the past three years and gained 10.81% over the past five years.

IShares Core MSCI EAFE funds provide market-cap-weighted portfolios of nearly all stocks in the developed international market outside of North America. Their category-representative portfolios and low turnover make them compelling options.

The funds track the MSCI EAFE Investable Market Index. It targets nearly all stocks from 21 overseas developed markets, encompassing 99% of the investable market. The index weights its holdings by market capitalization. Market-cap weighting is an efficient way to size holdings because it harnesses the market’s consensus opinion of each stock’s relative value. Stocks that perform well take up a larger share of the portfolio, while shrinking companies that may be struggling will have less importance.

Diversification is a strength of this strategy. The index usually holds around 2,600 names with its 10 largest positions typically accounting for around 11% of the portfolio. The strategy is not as broad as other index-tracking funds that include the emerging markets segment. But the funds still cover a lot of ground and reasonably represent the opportunity set available to active managers.

Emerging-markets stocks are a small part of the foreign market that this fund misses. While they usually constitute less than 10% of competitor’s portfolios, this fund is not positioned to reap the rewards should they perform well. However, their omission has been a buoy to fund performance since emerging markets stocks have struggled in recent years.

This strategy is shared among several exchange-traded funds and mutual funds. Most of them charge low fees that rank in their category’s cheapest quartile. Fees directly detract from total return, so low-cost funds and share classes should perform better and better represent the index than those that charge more.

iShares ESG Aware MSCI EAFE Index ETF

• Ticker: XSEA
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

Over the past 12 months, the BlackRock fund rose 21.89%, while the average fund in its category rose 17.69%. The fund, which launched in March 2019, has climbed 16.83% over the past three years and gained 10.87% over the past five years.

IShares ESG Aware MSCI EAFE ETF reasonably represents the large-cap foreign developed market while emphasizing stocks that exhibit favorable environmental, social, and governance characteristics.

The fund tracks the MSCI EAFE Extended ESG Focus Index. It targets large- and mid-cap stocks from 21 overseas developed markets, while optimizing the portfolio to maximize its exposure to stocks with high ESG ratings. The index aims to keep the expected tracking error to the MSCI EAFE Index within 0.50% to minimize the impact of its ESG screens. This effectively tilts the portfolio toward ESG factors without making large bets against the MSCI EAFE Index that may not be compensated. This fund’s performance should closely mirror that index as a result.

An optimizer manages tracking error to the MSCI EAFE Index by selecting and weighting index constituents. Since tracking error to this market-cap-weighted index must be kept to a minimum, much of the portfolio’s makeup resembles that benchmark, and it remains well diversified. The portfolio holds around 400 stocks, with its 10 largest positions accounting for around 12% of assets. It’s not as broad as the MSCI EAFE Index, but many of that index’s top holdings remain, like European multinationals with diversified revenue streams and robust competitive advantages.

Emerging-market and small-cap stocks are narrow parts of the investment universe that this strategy misses. While together they usually constitute just one-tenth of competitor portfolios, this strategy is not positioned to reap the rewards should they perform well. However, middling performance in those segments gave it a leg up on competitors in recent years.

For the five years through September 2025, the MSCI EAFE Extended ESG Focus Index returned 11% annualized, better than the Morningstar Category norm and some broad benchmarks but slightly worse than the MSCI EAFE Index. Going forward, short-term differences should wash out, and investors should expect the strategy to follow the ebbs and flows of the foreign developed markets.

Vanguard FTSE Developed All Cap ex North Amer Idx ETF

• Ticker: VIU
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

The C$10.8 billion fund has climbed 26.27% over the past 12 months, outperforming the average fund in its category, which rose 17.69%. The Vanguard fund, which launched in December 2015, has climbed 18.50% over the past three years and gained 11.16% over the past five years.

Vanguard FTSE Developed All Cap ex North America Index ETF has a market-cap-weighted portfolio that holds nearly all stocks from developed markets outside of North America. Its low fee and expansive portfolio make it one of the more appealing international stock funds available.

The fund tracks the FTSE Developed All Cap ex North America Index. It targets small-, mid-, and large-cap stocks from overseas developed markets, pulling in more than 3,600 names. The final portfolio weights its holdings by market capitalization. Market-cap weighting is an efficient way to size holdings because it harnesses the market’s consensus opinion of each stock’s relative value. Stocks that grow in size take up a larger share of the portfolio, while shrinking companies that may be struggling will have less importance.

Diversification is a strength of this portfolio, owing to its expansive target index. This fund holds over 3,600 stocks, with its 10 largest positions consistently accounting for around 10% of assets. No one position collects more than 2% of the allocation. Some of its largest holdings are European multinationals with diversified revenue streams and robust competitive advantages.

Emerging markets are a narrow part of the investment universe that this strategy misses. While they usually constitute just a tenth of competitor portfolios, this strategy is not positioned to reap the rewards should they perform well. However, middling performance in that segment gave it a leg up on competitors in most of the past few years.

Low fees also contribute to strong category-relative performance. The fund returned 11.5% annualized for the five years through September 2025, outpacing its average peer by 1.66 percentage points annualized. Volatility was slightly higher, but risk-adjusted returns also looked favorable relative to the category average. Going forward, investors should expect the strategy to do well when developed markets do well.

Vanguard FTSE Developed All Cap ex US Index ETF

• Ticker: VDU
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

The C$816.6 million fund has gained 25.87% over the past 12 months, while the average fund in its category is up 17.69%. The Vanguard fund, which launched in August 2013, has climbed 18.30% over the past three years and gained 11.06% over the past five years.

Vanguard FTSE Developed Markets Index’s market-cap-weighted portfolio holds nearly all stocks from the developed international market. Its low fee and expansive portfolio make it one of the more appealing international stock funds available.

The fund tracks the FTSE Developed ex US All Cap Index. It targets small-, mid-, and large-cap stocks from international developed markets, pulling in almost 4,000 names. The final portfolio weights its holdings by market capitalization. Market-cap weighting efficiently sizes holdings by harnessing the market’s consensus opinion of each stock’s relative value. Stocks that grow faster than peers take up a larger share of the portfolio, while struggling companies will have less importance.

Diversification is a strength of this portfolio, owing to its expansive target index. Unlike many competitors, it includes stocks from Canada and South Korea, improving its breadth. The fund holds almost 4,000 stocks, with its 10 largest positions regularly accounting for around 10% of assets. No one position accounts for more than 2% of the allocation. Some of this fund’s largest holdings are European multinationals with diversified revenue streams and robust competitive advantages.

Emerging-market stocks are a narrow part of the investment universe that this fund misses. While emerging-market stocks usually constitute just a tenth of competitor portfolios, this fund is not positioned to reap the rewards should they perform well. However, substandard performance in that segment gave this fund a leg up on competitors in recent years.

The Exchange-traded fund share class returned 11.4% annualized for the five years through September 2025, similar to other developed-market index funds but 1.2 percentage points better than the Morningstar Category average. Its volatility tends to be slightly elevated for this index, but risk-adjusted returns still measure up well.