By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) — Mutual funds used to be the only realistic option for U.S. investors wanting to secure a substantial exposure to non-U.S. equities.

Transaction costs, for example, used to be prohibitive, not only for the buying and selling of stocks listed on non-U.S. exchanges, but also for the conversion of dollars into the appropriate foreign currencies.

But, because of a variety of developments in recent years, this situation has changed. One is the growth in the number of foreign companies whose stocks trade on a U.S. exchange as American Depository Receipts. Another is the explosion in the number of exchange-traded funds that invest in foreign equity markets.

To help sift through the mushrooming number of choices now available, I turned to the recommendations of those investment advisers that have regularly had a substantial exposure to non-U.S. equity markets. Reflecting the shift in the number and types of investment vehicles available, the most-recommended securities were individual stocks — not mutual funds.

They are, in descending order of number of recommendations from the investment advisers I monitor, along with their country of incorporation and/or major business operations:

— BHP Billiton (Australia) /zigman2/quotes/208108397/composite BHP +2.06%  

— Rio Tinto (Australia) /zigman2/quotes/202627887/composite RIO +1.43%  

— Total S.A. (France)  

— Diageo PLC (England) /zigman2/quotes/208129584/composite DEO +1.40%  

— Novartis AG (Switzerland) /zigman2/quotes/203243705/composite NVS +1.07%  

— Petrochina (China) /zigman2/quotes/205108732/composite PTR -1.41%  

— Petroleo Brasileiro (Brazil) /zigman2/quotes/200745132/composite PBR +1.25%  

— Telefonica SA (Spain) /zigman2/quotes/207034643/composite TEF +0.44%  

Lest this list lead you to believe that mutual funds are being completely shunned by these advisers for their foreign equity exposure, here are their most-recommended funds (in descending order of number of recommendations):

— Dodge & Cox International /zigman2/quotes/207409772/realtime DODFX +0.13%  

— Vanguard Emerging Markets /zigman2/quotes/205715973/realtime VEIEX -1.14%  

— Artisan International Value /zigman2/quotes/207322356/realtime ARTKX -0.48%  

— Fidelity Emerging Markets /zigman2/quotes/210323686/realtime FEMKX -1.50%  

— Fidelity New Markets Income /zigman2/quotes/208479643/realtime FNMIX +0.14%  

— Matthews Asia Asian Growth & Income /zigman2/quotes/209008633/realtime MACSX -1.51%  

— Matthews Asia Pacific Equity Income /zigman2/quotes/207688991/realtime MAPIX -2.38%  

— Vanguard International Growth /zigman2/quotes/207607605/realtime VWIGX -1.90%  

/zigman2/quotes/208108397/composite

Add to watchlist BHP

BHP Group Ltd. ADR

US : U.S.: NYSE

$ 65.80

+1.33 +2.06%

Volume: 10.17M

Jan. 27, 2022 4:00p

P/E Ratio

15.08

Dividend Yield

9.15%

Market Cap

$163.53 billion

Rev. per Employee

N/A

/zigman2/quotes/202627887/composite

Add to watchlist RIO

Rio Tinto PLC ADR

US : U.S.: NYSE

$ 75.09

+1.06 +1.43%

Volume: 4.42M

Jan. 27, 2022 4:00p

P/E Ratio

6.56

Dividend Yield

9.12%

Market Cap

$120.01 billion

Rev. per Employee

$1.22M

/zigman2/quotes/208129584/composite

Add to watchlist DEO

Diageo PLC ADR

US : U.S.: NYSE

$ 200.89

+2.78 +1.40%

Volume: 575,310

Jan. 27, 2022 4:00p

P/E Ratio

33.06

Dividend Yield

1.96%

Market Cap

$114.25 billion

Rev. per Employee

$616,562

/zigman2/quotes/203243705/composite

Add to watchlist NVS

Novartis AG ADR

US : U.S.: NYSE

$ 85.14

+0.90 +1.07%

Volume: 2.99M

Jan. 27, 2022 4:00p

P/E Ratio

19.65

Dividend Yield

2.44%

Market Cap

$188.72 billion

Rev. per Employee

$483,647

/zigman2/quotes/205108732/composite

Add to watchlist PTR

PetroChina Co. Ltd. ADR

US : U.S.: NYSE

$ 50.51

-0.72 -1.41%

Volume: 116,410

Jan. 27, 2022 4:00p

P/E Ratio

9.76

Dividend Yield

5.94%

Market Cap

$145.90 billion

Rev. per Employee

$583,185

/zigman2/quotes/200745132/composite

Add to watchlist PBR

Petroleo Brasileiro S/A ADR

US : U.S.: NYSE

$ 13.78

+0.17 +1.25%

Volume: 46.73M

Jan. 27, 2022 4:00p

P/E Ratio

3.54

Dividend Yield

14.28%

Market Cap

$85.35 billion

Rev. per Employee

$1.50M

/zigman2/quotes/207034643/composite

Add to watchlist TEF

Telefonica S.A. ADR

US : U.S.: NYSE

$ 4.56

+0.02 +0.44%

Volume: 6.67M

Jan. 27, 2022 4:00p

P/E Ratio

2.14

Dividend Yield

3.64%

Market Cap

$26.32 billion

Rev. per Employee

$429,389

/zigman2/quotes/207409772/realtime

Add to watchlist DODFX

Dodge & Cox International Stk Fund

US : U.S.: Nasdaq

$ 47.91

+0.06 +0.13%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/205715973/realtime

Add to watchlist VEIEX

Vanguard Emerging Markets Stock Index Fund;Investor

US : U.S.: Nasdaq

$ 30.48

-0.35 -1.14%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/207322356/realtime

Add to watchlist ARTKX

Artisan International Value Fund;Investor

US : U.S.: Nasdaq

$ 41.23

-0.20 -0.48%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/210323686/realtime

Add to watchlist FEMKX

Fidelity Emerging Markets Fund

US : U.S.: Nasdaq

$ 40.05

-0.61 -1.50%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/208479643/realtime

Add to watchlist FNMIX

Fidelity New Markets Income Fund

US : U.S.: Nasdaq

$ 13.85

+0.02 +0.14%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/209008633/realtime

Add to watchlist MACSX

Matthews Asian Growth & Income Fund;Investor

US : U.S.: Nasdaq

$ 15.62

-0.24 -1.51%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/207688991/realtime

Add to watchlist MAPIX

Matthews Asia Dividend Fund;Investor

US : U.S.: Nasdaq

$ 17.25

-0.42 -2.38%

Volume: 0.00

Jan. 27, 2022

/zigman2/quotes/207607605/realtime

Add to watchlist VWIGX

Vanguard International Growth Fund;Investor

US : U.S.: Nasdaq

$ 37.73

-0.73 -1.90%

Volume: 0.00

Jan. 27, 2022