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Top-Performing Foreign ETFs of Q1

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Wall Street experienced massive volatility in the first quarter, while international markets remained relatively stable or gained momentum. Trade uncertainty under the new U.S. administration has fueled concerns about rising inflation and a slowing U.S. economy, which has worked in favor of international markets.

Vanguard Tax Managed Fund FTSE Developed Markets ETF (VEA - Free Report) is up 7.4% this year (as of March 28, 2025), while the SPDR S&P 500 ETF Trust (SPY - Free Report) has lost about 5%. Meanwhile, iShares Asia 50 ETF (AIA - Free Report) has jumped 7.6% in 2025, and iShares MSCI Emerging Markets ETF (EEM - Free Report) has advanced 4.8%.

Why International ETFs Are Surging This Year

Cheaper Valuation: Most international markets and ETFs have been undervalued in comparison to U.S. stocks and ETFs.The P/E ratio of the largest Europe ETF Vanguard FTSE Europe ETF (VGK - Free Report) stands at 17.0X while its U.S. counterpart — Vanguard S&P 500 ETF (VOO - Free Report) — trades at a P/E of 27.5X.

iShares MSCI Japan ETF (EWJ - Free Report) has a P/E ratio of 16.57X. The ETF EEM trades at a P/E of15.07X. iShares China Large-Cap ETF (FXI - Free Report) trades at a P/E of 13.27X. iShares India 50 ETF (INDY - Free Report) has a P/E of 23.51X while iShares MSCI Brazil ETF (EWZ) has a P/E of 9.47X.

Stimulus Abroad: The European Central Bank has been on a rate-cut spree. India and China have also been on a path of policy stimuli (either fiscal or monetary or both). Although the Bank of Japan has been hiking rates, the interest rate backdrop remains low.

In contrast, the United States has taken a different approach as the Department of Government Efficiency has prioritized budget cuts, reducing federal expenditures rather than expanding them. The Fed has also been acting less dovish.

Top-Performing ETFs in Focus

Against this backdrop, below we highlight a few winning foreign exchange-traded funds (ETFs) of the first quarter. Investors should note that high-dividend ETFs outperformed in the quarter.

Invesco International BuyBack Achievers ETF IPKW – Up 16.6% YTD

The underlying NASDAQ International BuyBack Achievers Index tracks the performance of common stocks of foreign companies that meet the requirements to be classified as BuyBack Achievers. The index comprises securities issued by corporations that have effected a net reduction in shares outstanding of 5% or more in its latest fiscal year. The fund charges 55 bps in fees and yields 3.82% annually.

Global X MSCI SuperDividend EAFE ETF (EFAS - Free Report) – Up 16.1% YTD

The underlying MSCI EAFE Top 50 Dividend Index invests in 50 of the highest-yielding equity securities from the international developed markets across Europe, Australasia and the Far East. The fund charges 56 bps in fees and yields 5.93% annually.

Franklin FTSE Eurozone ETF FLEU – Up 14.8% YTD

The underlying FTSE Developed Eurozone Index measures the performance of large and mid-capitalization stocks from developed Eurozone countries. The fund charges 9 bps in fees and yields 2.77% annually.

iShares International Select Dividend ETF (IDV - Free Report) – Up 14.6% YTD

The underlying Dow Jones EPAC Select Dividend Index measures the performance of a select group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time. The fund charges 49 bps in fees and yields 5.51% annually.

WisdomTree International High Dividend Fund (DTH - Free Report) – Up 13.5% YTD

The underlying WisdomTree International High Dividend Index is a fundamentally weighted Index that measures the performance of companies with high dividend yields selected from the WisdomTree International Equity Index. The fund charges 58 bps in fees and yields 4.66% annually.

 

 

 


 

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