It used to be that you could reduce overall portfolio volatility by investing in international markets. When US markets went down, international ones went up or at least held steady. The opposite occurred when US markets went up. Unfortunately, this isn't necessarily true anymore.
There have been a number of reports that have looked at the correlation between US and international markets. They have found that these markets are now more correlated than they used to be and so we can no longer bank on reducing portfolio volatility just by buying in to international markets.
Still, a diversified portfolio wouldn't be very diversified if it didn't hold some international assets. And that's where Barclays international exchange traded fund (EFA) comes in. Their offering tracks the MSCI EAFE index which in turn tracks the performance of select companies in 21 developed countries including Australia and many throughout Europe and the Far East. This variety is great, but be warned that the market-capitalization weighted nature of this ETF results in 50% of its value being allocated to the United Kingdom and Japan. Other countries like Ireland end up being allocated just 1%, while Singapore's weight in this basket is 0.77%, Austria's is 0.58%, Hong Kong's is 1.75%, and Sweden's is 2.46%.
This ETF complements Barclays emerging markets ETF. Both of which are ETFs that I hold in my portfolio.