Editors' Index Fund Picks - International and Emerging Markets Equity By IndexFunds.com Staff October 15, 2002

The lists below single out some of favorite index funds covering the international and emerging markets equity asset classes. Many of the funds are based on MSCI's international EAFE index.

Top International Funds - in no particular order
Fund name	Ticker	Expense ratio
Vanguard Tax-Managed International	VTMGX	0.35%
Vanguard Developed Markets Index	VDMIX	0.32%
*iShares MSCI EAFE Index Fund	EFA	0.35%

Other International Funds - in no particular order
Fund name	Ticker	Expense ratio
Vantagepoint Overseas II	VPOEX	0.48%
Summit EAFE International Index Fund	SAEIX	1.25%
Merrill Lynch International Index D	MDIIX	0.89%
Fidelity Spartan International Index	FSIIX	0.35%
Eclipse EAFE Index	NIEAX	0.94%
E*TRADE International Index	ETINX	0.65%
Dreyfus International Stock Index	DIISX	0.60%
TIAA-CREF International Equity	TIINX	0.49%

The table below lists a few quality international growth and value funds.

International Style Funds - in no particular order
Fund name	Ticker	Expense ratio
Vanguard International Growth Fund	VWIGX	0.81%
Vanguard International Value	VTRIX	0.64%
DFA International Value III †	DFIX	0.33%

Here's a few broad index funds covering international regions.

International Regional Funds - in no particular order
Fund name	Ticker	Expense ratio
Vanguard Pacific Stock Index	VPACX	0.37%
Waterhouse Asian Index	TDASX	0.58%
*iShares MSCI Pacific ex-Japan	EPP	0.50%
Waterhouse European Index	TDEUX	0.58%
Vanguard Euro Stock Index	VEURX	0.34%
*iShares S&P Europe 350 Index	IEV	0.60%
*iShares S&P Latin America 40 Index	ILF	0.50%

Emerging markets index funds carry plenty of risk but tend not to correlate with the domestic stock market. Emerging markets indexes have performed poorly relative to domestic benchmarks through much of the past decade.

Emerging Markets Funds - in no particular order
Fund name	Ticker	Expense ratio
Vanguard Emerging Markets Stock Index	VEIEX	0.60%
DFA Emerging Markets Portfolio †	DFEMX	0.90%
*iShares MSCI Emerging Markets	TBA	TBA

For each asset class there are several popular indexes to choose from. Our goal is to identify the funds that track those indexes efficiently and cheaply. None of the funds on our list charge front or deferred loads, or 12b-1 fees. We listed some funds with fairly high fees because investors who choose to work with broker or advisors understand this may be part of how they earn their fees. In the case of both ETFs and funds only available through advisors (such as the Dimensional Fund Advisor or DFA funds) there are additional transaction or holding costs.

Our list is by no means complete, but we think it's a good starting point. We're very interested in comments you might have. We're willing to consider even higher-cost funds for our list, but we need to be convinced. Please post comments to our bulletin boards.

For all lists, the funds are in no particular order and not listed by preference.

Of course, an asset allocation plan is more than just finding good building blocks. They must fit together. But we think this is a good start.