We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
International ETFs to Watch as Foreign Stock Markets Beat the US
Read MoreHide Full Article
Key Takeaways
International markets outperformed in 2025, with the Global Markets ex-US Index gaining 32%.
A weaker dollar and strong gains in Europe, Japan, and emerging markets fueled foreign equity leadership.
ETFs such as JIVE offer diversified exposure to the ongoing global rally.
In a dramatic shift in market leadership, 2025 marks the year international stock markets finally break the decade-long ‘U.S. exceptionalism’ trend. According to data from Morningstar, the Morningstar Global Markets ex-US Index soared 32% in 2025, nearly doubling the 17% return of the Morningstar US Market Index.
This significant outperformance places international equities — and, by extension, ETFs that hold them — in the spotlight as investors pivot away from a top-heavy U.S. market toward more attractively valued foreign opportunities.
What Fueled the Global Rally?
The international surge was not confined to a single region but reflected a broad-based recovery across both developed and emerging economies. Several key factors and regions outperformed the United States last year:
• Currency Tailwinds: A weakening U.S. dollar, which saw its steepest half-year decline since 1991, acted as a massive tailwind for U.S.-based investors holding foreign assets.
• Developed Markets: European markets led the charge, with Spain (Ibex 35) gaining nearly 50% and Germany (DAX) rising 23% last year (as per data from Trading Economics), fueled by fiscal stimulus and a resurgence in bank stocks. Japan (up 26%) also beat America as corporate governance reforms reinvigorated the Nikkei.
• Emerging Markets: The MSCI EM Index returned approximately 34% in 2025. Standout performers included South Korea (+43%), driven by its critical role in the AI hardware supply chain. On the other hand, Latin America rallied as a perceived winner from shifting U.S. trade and tariff policies, with countries such as Brazil and Mexico among the standouts, posting gains of nearly 30% after a dismal 2024.
Outlook for 2026
The general market consensus for the international equity market this year remains bullish, with many experts believing we are in the early stages of a multi-year cycle of international leadership.
JP Morgan's chief ETF strategist told CNBC that he expects international equity markets to continue outperforming, with the dollar projected to depreciate about 1% annually over the next decade. Also, valuations remain strong with international equities trading at a 32% discount to their U.S. counterparts, offering more room for future growth.
While the United States faces concerns over record concentration and high price-to-earnings ratios, international markets are likely to offer higher dividend yields and untapped value.
International ETFs to Watch
Considering the aforementioned discussion, as the "Sell America Trade" continues, ETFs like those listed below that provide exposure to international stocks remain a strategic way to capitalize on this global momentum.
State Street SPDR Portfolio Developed World ex-US ETF (SPDW - Free Report)
This fund, with assets under management (AUM) worth $37.78 billion, offers exposure to 2,387 developed international equities outside the United States. Its top three holdings include Samsung Electronics (1.76%), ASML Holding (ASML - Free Report) (1.73%) and Roche Holding (RHHBY - Free Report) (1.03%).
SPDW has rallied 34% over the past year. The fund charges 3 basis points (bps) as fees. It traded at a good volume of 16.33 million shares in the last trading session.
This fund, with net assets worth $1.53 billion, offers exposure to 357 stocks across developed and emerging foreign markets, spanning all market capitalizations. Its top three holdings include Samsung Electronics (2.27%), RHHBY (1.84%) and HSBC Holdings (HSBC - Free Report) (1.74%).
JIVE has surged 52.9% over the past year. The fund charges 55 bps as fees. It traded at a volume of 0.42 million shares in the last trading session.
This fund, with net assets worth $1.23 billion, offers exposure to 985 international stocks (outside the United States). Its top three holdings include ASML (2.14%), RHHBY (1.27%) and HSBC (1.22%).
BKIE has soared 30.3% over the past year. The fund charges 4 bps as fees. It traded at a volume of 0.18 million shares in the last trading session.
Amplify CWP International Enhanced Dividend Income ETF (IDVO - Free Report)
This fund, with net assets worth $940.7 million, offers exposure to 86 international dividend-paying stocks. Its top three holdings include Alibaba (BABA - Free Report) (4.26%), Novartis (NVS - Free Report) (3.63%), and Taiwan Semiconductor (TSM - Free Report) (3.41%).
IDVO has surged 34.7% over the past year. The fund charges 65 bps as fees. It traded at a volume of 0.63 million shares in the last trading session.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
International ETFs to Watch as Foreign Stock Markets Beat the US
Key Takeaways
In a dramatic shift in market leadership, 2025 marks the year international stock markets finally break the decade-long ‘U.S. exceptionalism’ trend. According to data from Morningstar, the Morningstar Global Markets ex-US Index soared 32% in 2025, nearly doubling the 17% return of the Morningstar US Market Index.
This significant outperformance places international equities — and, by extension, ETFs that hold them — in the spotlight as investors pivot away from a top-heavy U.S. market toward more attractively valued foreign opportunities.
What Fueled the Global Rally?
The international surge was not confined to a single region but reflected a broad-based recovery across both developed and emerging economies. Several key factors and regions outperformed the United States last year:
• Currency Tailwinds: A weakening U.S. dollar, which saw its steepest half-year decline since 1991, acted as a massive tailwind for U.S.-based investors holding foreign assets.
• Developed Markets: European markets led the charge, with Spain (Ibex 35) gaining nearly 50% and Germany (DAX) rising 23% last year (as per data from Trading Economics), fueled by fiscal stimulus and a resurgence in bank stocks. Japan (up 26%) also beat America as corporate governance reforms reinvigorated the Nikkei.
• Emerging Markets: The MSCI EM Index returned approximately 34% in 2025. Standout performers included South Korea (+43%), driven by its critical role in the AI hardware supply chain. On the other hand, Latin America rallied as a perceived winner from shifting U.S. trade and tariff policies, with countries such as Brazil and Mexico among the standouts, posting gains of nearly 30% after a dismal 2024.
Outlook for 2026
The general market consensus for the international equity market this year remains bullish, with many experts believing we are in the early stages of a multi-year cycle of international leadership.
JP Morgan's chief ETF strategist told CNBC that he expects international equity markets to continue outperforming, with the dollar projected to depreciate about 1% annually over the next decade. Also, valuations remain strong with international equities trading at a 32% discount to their U.S. counterparts, offering more room for future growth.
While the United States faces concerns over record concentration and high price-to-earnings ratios, international markets are likely to offer higher dividend yields and untapped value.
International ETFs to Watch
Considering the aforementioned discussion, as the "Sell America Trade" continues, ETFs like those listed below that provide exposure to international stocks remain a strategic way to capitalize on this global momentum.
State Street SPDR Portfolio Developed World ex-US ETF (SPDW - Free Report)
This fund, with assets under management (AUM) worth $37.78 billion, offers exposure to 2,387 developed international equities outside the United States. Its top three holdings include Samsung Electronics (1.76%), ASML Holding (ASML - Free Report) (1.73%) and Roche Holding (RHHBY - Free Report) (1.03%).
SPDW has rallied 34% over the past year. The fund charges 3 basis points (bps) as fees. It traded at a good volume of 16.33 million shares in the last trading session.
JPMorgan International Value ETF (JIVE - Free Report)
This fund, with net assets worth $1.53 billion, offers exposure to 357 stocks across developed and emerging foreign markets, spanning all market capitalizations. Its top three holdings include Samsung Electronics (2.27%), RHHBY (1.84%) and HSBC Holdings (HSBC - Free Report) (1.74%).
JIVE has surged 52.9% over the past year. The fund charges 55 bps as fees. It traded at a volume of 0.42 million shares in the last trading session.
BNY Mellon International Equity ETF (BKIE - Free Report)
This fund, with net assets worth $1.23 billion, offers exposure to 985 international stocks (outside the United States). Its top three holdings include ASML (2.14%), RHHBY (1.27%) and HSBC (1.22%).
BKIE has soared 30.3% over the past year. The fund charges 4 bps as fees. It traded at a volume of 0.18 million shares in the last trading session.
Amplify CWP International Enhanced Dividend Income ETF (IDVO - Free Report)
This fund, with net assets worth $940.7 million, offers exposure to 86 international dividend-paying stocks. Its top three holdings include Alibaba (BABA - Free Report) (4.26%), Novartis (NVS - Free Report) (3.63%), and Taiwan Semiconductor (TSM - Free Report) (3.41%).
IDVO has surged 34.7% over the past year. The fund charges 65 bps as fees. It traded at a volume of 0.63 million shares in the last trading session.