Investing Outside Canada: Best International Stocks (2026)

With USMCA negotiations about to begin, and the Canadian housing market having a pretty rough go, we’re getting a lot of emails and questions about the best international stocks outside of Canada and the USA. 

For some quick background, Canadians love buying stuff as we know. We’re not alone in this and it’s generally referred to as home country bias. We buy the banks we use (and who sponsor our arenas), the pipelines we read about, and the telecoms that send us massive bills. Familiarity often feels safe, but in portfolio terms, it usually isn’t the ideal long-term philosophy. 

The Canadian stock market is small. It is also heavily concentrated in a handful of sectors. If most of your equity portfolio lives in Canada, you are not quietly building security. You are making a very loud bet on one country and a pretty specific list of industries. 

Vanguard’s latest home-bias research found Canadians still had about 50% of their equity allocation in Canadian stocks even though Canada represented only 2.6% of the global equity market in that data set. Vanguard’s conclusion was that a 30% Canada and 70% international split is a more reasonable long-run compromise than extreme home bias. 

The good news is that fixing home country bias is relatively easy now relative to thirty years ago. You don’t need to open a foreign brokerage account. You don’t need to trade directly on overseas exchanges. You definitely do not need to spend your weekends reading quarterly earnings reports trying to decide between a Swiss drug company, a Japanese manufacturer, and a Taiwanese chipmaker.

For most Canadians, the best “international stocks” are not individual stocks at all. They are diversified low-cost ETFs listed right here in Canada that hold U.S., developed international, emerging-market, or global stocks under the hood. 

Should Canadians Invest In International Stocks?

Yes! In most cases, Canadians should absolutely get investment exposure outside Canada.

MSCI’s ACWI IMI data showed Canada at roughly 3.1% of the global investable equity market at the end of 2025. For comparison’s sake, the U.S. was about 62.7%. Emerging markets were still a meaningful chunk of the world beyond that, with developed markets outside North America representing a much larger pool than Canada on its own. 

It’s important to understand that a Canada-only stock portfolio is not “the market.” A lot of Canadians still behave as if buying international stocks is an exotic investment idea.

The TSX composite exposure breaks down at roughly 31% financials, 19% materials, 18% energy, and 10% industrials. Information technology was only about 7%. So what does a Canadian-only equity portfolio really buy you?

A whole lot of Canadian bank stocks, insurance stocks, pipeline stocks, energy stocks, mining stocks, utilities stocks, and the two Canadian railway stocks. Not much in software, semiconductors, global internet platforms, large pharma, medical devices, or many of the international consumer brands that dominate spending around the world. That does not mean Canadian stocks are bad. It means that as a group they do not at all represent the wide variety of ways corporations around the world make money.

US Stocks vs Canadian Stocks

I’ve written in-depth about the Canadian stock market vs US stock market. If Canadians are going to diversify beyond Canada, the U.S. is the obvious first stop. It’s the largest stock market in the world by a mile 1.6km, and it gives you access to large sectors the TSX is missing. MSCI USA’s March 2026 factsheet showed the U.S. market tilted heavily to information technology, with major weights in communication services, consumer discretionary, health care, and financials as well.  

Those stocks actually compliment the Canadian stock market pretty well. 

The last decade is also a good reminder that U.S. exposure has mattered a lot. As of March 31, 2026, MSCI USA had a 10-year annualized gross return of 14.16%, versus 11.81% for MSCI Canada and 11.88% for MSCI ACWI. That gap may shrink or reverse in future. But it is one more reason a Canadian investor should think twice before treating U.S. stocks as optional.

Why Investing in International Stocks Outside of North America Is a Good Idea

Here is where people often stop a little early.

Owning Canada and the U.S. is better than owning Canada alone, but it still leaves out a big chunk of the world’s stock markets.

Developed international markets outside North America include major exposure to Japan, the U.K., France, Switzerland, Germany, Korea, Australia, and the Netherlands.

Major companies such as Samsung Electronics, ASML, AstraZeneca, Novartis, Roche, HSBC, Nestle, Shell, and Toyota all deserve representation in your portfolio. That list is a pretty good reminder that not all important global businesses are American. 

Emerging markets matter too, even if you keep them as a smaller allocation. Vanguard’s VEE and BlackRock’s XEC are currently dominated by China, Taiwan, India, and South Korea, with huge positions in companies such as Taiwan Semiconductor, Tencent, Alibaba, Reliance, HDFC Bank, Samsung Electronics, and SK Hynix.

Again, nobody is saying these markets are guaranteed to outperform the average returns of the Canadian stock market. The point is that future winners will not politely limit themselves to Canada and the U.S. just because that would simplify our spreadsheets. 

Do I Need to Buy International Stocks On Overseas Stock Exchanges?

You probably don’t need to do anything fancy in terms of investing using other exchanges. A Canadian-listed ETF that tracks a foreign stock market gives you economic exposure to that foreign market. What matters is what the ETF owns, not where the ETF itself trades. 

That said, by going with only the ETF route you are going to give up the chance to select individual stocks. If you want to buy foreign companies without opening access to a foreign stock exchange, you’ll probably want to look into something called a depositary receipt.

The US version is an American Depositary Receipt, or ADR. An ADR is a US-traded security that represents shares of a foreign company held by a depositary bank. It lets investors get exposure to a big foreign company like Toyota just by using the usual exchanges like the New York Stock Exchange or Nasdaq exchange.

So, if a Canadian buys a US-listed ADR of a foreign company, they are not really buying a “U.S. stock.” They are buying exposure to a foreign company through a U.S. listing. That can make it easier to buy specific companies from Europe, Japan, Taiwan, South Korea, Brazil, or other markets without trading directly on those local exchanges.

Canada now actually has a similar idea called Canadian Depositary Receipts, or CDRs. These were launched by CIBC on the NEO Exchange in 2021 and now trade on Cboe Canada. CDRs are designed to give Canadian investors exposure to large global companies in Canadian dollars, with fractional share ownership and a built-in currency hedge. The main appeal is convenience due to the fact CDRs trade in Canadian dollars, are available through many Canadian brokerages, and make high-priced U.S. shares easier to buy in smaller pieces.

Best International ETFs for Canadians

As you know if you’ve read our popular article on the Best ETFs for Canadians, there is no single best ETF for everyone, but there are generally several “best in class” depending on what your portfolio goals are. 

My favourite Canadian all-in-one ETFs such as VEQT and XEQT are the obvious place to start when looking for a simple way to get international stock exposure. Vanguard’s current portfolio disclosure for VEQT shows a roughly 45.0% U.S., 30.6% Canada, 17.3% developed ex-North America, and 7.1% emerging-markets mix. That is a perfectly reasonable example of how an all-equity ETF can solve global diversification in one trade. 

If you already hold a separate Canada ETF and want the rest of the world in one fund, XAW and VXC are the cleanest ideas. XAW’s objective is to replicate the MSCI ACWI ex Canada IMI Index. VXC tracks the FTSE Global All Cap ex-Canada China A Inclusion Index and currently carries a 0.22% MER.

How to Buy International Stocks

For most Canadians, the steps to purchase an international stock are pretty painless:

1) Open or use a self-directed account at a Canadian brokerage.

2) Decide whether you want one ETF or a small set of ETF building blocks.

3) Buy the ETF on the TSX in Canadian dollars if that is the version you chose.

4) Qtrade, Questrade, and the rest of the Canadian brokerages allow you to buy and sell on the US-based stock exchanges as well as Canadian – so that’s easy (although you will have to buy in USD).

5) Purchase a CDR or ADR if you want a single stock and your brokerage doesn’t allow trading on that country’s brokerage.

All of the best Canadian online brokers also let you buy US-listed ETFs and individual US stocks.

Tax Implications of Buying U.S. and International Stocks in Canada

Before we get too far into the weeds, here is the big-picture rule as far as trying to juggle all of this ETFs plus registered accounts stuff: tax optimization should not be the tail that wags the investing dog.

Your first job is to build a sensible globally diversified portfolio. Your second job is to keep costs low. Your third job is to actually stick with the plan when markets get ugly. Only after all that should we start worrying about whether a US-listed ETF inside an RRSP is a few basis points more efficient than a Canadian-listed ETF.

In other words, do not let a small withholding-tax advantage talk you into a portfolio you do not understand.

For most Canadians, the simple answer is buy low-cost Canadian-listed ETFs that give you the international exposure you want, hold them in the account where you have room, and move on with your life. But if you want to squeeze a bit more tax efficiency out of your portfolio, here is how the pieces fit together.

When Canadians own US dividend-paying securities directly, the U.S. withholding tax rate is generally reduced to 15% instead of 30%, assuming the proper paperwork is in place. That is why Canadian brokerages care about the W-8BEN form. It tells the US side that you are a Canadian resident and may qualify for the treaty rate.

RRSPs and RRIFs are usually the most tax-friendly home for direct US-listed ETFs. That is because treaty-recognized retirement accounts can generally be exempt from U.S. withholding tax at source. So, if you hold something like VTI, VOO, ITOT, or another US-listed equity ETF directly inside an RRSP or RRIF, you can usually avoid that 15% U.S. withholding tax on dividends.

However, it’s worth noting that the withholding tax is only charged on dividends (not capital gains) and that it’s not life-changing for most smaller portfolios. To buy US-listed ETFs, you need US Dollars. That means dealing with currency conversion, brokerage foreign exchange spreads, Norbert’s Gambit, US dollar tracking, and slightly messier portfolio management. If you are managing a large RRSP, it can be worth it. 

TFSAs do not get the same U.S. withholding tax treatment. If you hold US stocks or US-listed ETFs in a TFSA, the 15% U.S. withholding tax on dividends generally still applies, and you usually cannot recover it. That does not mean US stocks are “bad” in a TFSA. It just means the TFSA’s main benefit is tax-free growth and tax-free withdrawals, not special U.S. dividend treatment.

Taxable accounts (aka: non-registered) are a different value proposition yet again. If foreign tax is withheld on dividends in a non-registered account, Canadian investors can often claim a foreign tax credit to reduce double taxation.

The CRA points taxpayers to Form T2209 and line 40500 for this reason. You still report the foreign income in Canadian dollars, and foreign dividends do not get the same favourable dividend tax credit treatment as eligible Canadian dividends, but at least there is a mechanism to account for tax already paid to another country.

Here is the rough asset-location cheat sheet:

Type of Investment	Best Account for Tax Purposes
Canadian equity ETFs	TFSA if you have room, then RRSP if you have room. If both are fully contributed to then use a non-registered account.
U.S equity ETFs traded on the New York stock exchange (purchased with US Dollars) such as VTI	RRSP (make room for them)
U.S equities within a Canadian ETF (HXS) traded on the Toronto stock exchange using Canadian Dollars	TFSA if there’s room, then non-registered if you have it.
International equity ETFs that don’t include U.S stocks	TFSA (make room for them)
Bond ETFs or GICs	RRSP if you have room, then TFSA if you have room. If both are fully contributed to then use a non-registered account.

Your best setup depends on your account sizes, tax bracket, contribution room, whether you have a spouse, whether you need income, and whether you actually want to maintain a multi-account spreadsheet for the rest of your investing life. 

There are also specialized products such as HXS, the Global X S&P 500 Index Corporate Class ETF. HXS is a Canadian-listed total return ETF (also known as a swap based ETF) that gives exposure to the S&P 500 in a different structure than a plain vanilla ETF. The basic appeal is that it does not pay regular dividend distributions in the same way, which can make it tax-efficient in a taxable account for investors who want U.S. stock exposure but do not need current income. 

One more wrinkle: large US-situs holdings can raise US estate-tax questions. The IRS says nonresident noncitizens may have filing obligations once US-situated assets exceed USD 60,000. For most regular investors, this is not the main thing to lose sleep over. For larger portfolios, it is a reason to get proper cross-border tax advice.

If you are just getting started, do not begin with withholding tax. Begin by getting globally diversified. A Canadian investor with a 100% Canada portfolio has a much bigger issue than losing a small slice of U.S. dividends to withholding tax.

Once your portfolio is large enough, and once you are comfortable managing RRSPs, TFSAs, taxable accounts, and possibly USD trades, then optimization can be worth exploring. Until then, a low-cost Canadian-listed ETF is often the cleaner answer.

Top 10 International Stocks for Canadian Diversification

If you’re absolutely sure you want to choose individual international stocks instead of an international ETF, then here are my thoughts as of May 2026. Now I should clarify here that these picks are chiefly on the basis of diversification over the long term and are not necessarily stock picking in terms of picking undervalued stocks or P/E multiples or anything like that. 

Stock	Ticker	Country	What it adds that Canada lacks
Microsoft	MSFT	U.S	Enterprise software, cloud, AI infrastructure, productivity software
Alphabet	GOOGL / GOOG	U.S	Search, digital advertising, YouTube, AI, cloud
NVIDIA	NVDA	U.S	AI chips, GPUs, accelerated computing
Taiwan Semiconductor	TSM	Taiwan	Semiconductor manufacturing / foundry exposure
ASML	ASML	Netherlands	Semiconductor equipment and lithography
Eli Lilly	LLY	U.S	Big pharma, obesity drugs, diabetes, biotech-style innovation
LVMH	MC.PA / LVMUY	France	Luxury goods, global consumer discretionary
Toyota	TM / 7203.T	Japan	Global auto manufacturing, hybrids, industrial Japan
Visa	V	U.S	Global payments network and financial technology
Nestlé	NESN.SW / NSRGY	Switzerland	Global consumer staples, coffee, pet care, nutrition

FAQ on International Stock Investing for Canadians

What’s Stopping You From Investing Outside of Canada?

Most Canadians should invest outside Canada. Not because foreign stocks are guaranteed to outperform, but because Canada is a small, sector-heavy corner of the global market, and there is no good reason for most long-term investors to make that their entire stock portfolio. 

The easiest answer, and usually the best one, is a low-cost ETF listed in Canada that gives you U.S., developed international, emerging-market, or total-world exposure. In other words, the best international stocks for Canadians are usually boring old ETFs kept inside an RRSP or TFSA.