After a decade-plus reign of U.S. market supremacy, global equities seem to be making a comeback; and with them, ETFs tracking international stocks are increasingly on investors’ radar. The Morningstar Global Markets ex-US Index surged about 32% in 2025, nearly double the 17% return of the U.S. market benchmark, raising the question of whether a broader portfolio rotation might be underway.
The broad international ETFs have been clear beneficiaries. The SPDR Portfolio Developed World ex-US ETF (NYSE:SPDW), which holds over 2,300 developed-market stocks ex-U.S., climbed more than 30% over the past year. Its exposure to global leaders such as Samsung Electronics, ASML Holding (NASDAQ:ASML) and Roche positions it squarely within the international recovery narrative while maintaining very low fees.
Currency dynamics played a big part. A softer U.S. dollar, its sharpest half-year decline since the early 1990s, boosted returns for dollar-based investors holding overseas assets. Simultaneously, international markets had the tailwind of an improving economic momentum across both developed and emerging regions.
Much of the rally was led by Europe, helped by fiscal stimulus and a rebound in financial stocks. Spain’s IBEX 35 jumped around 50% last year, while Germany’s DAX rose about 23%.
But then came the emerging markets to add more fuel. The MSCI Emerging Markets Index returned about 34% in 2025, as South Korea benefited from its lead role in the AI hardware supply chain, while Brazil and Mexico advanced on the shifting global trade dynamics.
Strategists increasingly argue this may not be a short-lived trade. Some forecasts suggest continued dollar softness and highlight that international equities still trade at a sizable valuation discount relative to U.S. stocks. “Opportunity still exists in developed ex-U.S. financials given still deep valuation discounts,” said a JPMorgan report from late last year. Higher dividend yields abroad also strengthen the diversification case.
Still, declaring the end of U.S. market leadership might be premature. American tech giants remain dominant, and global risks, from geopolitics to currency volatility, could quickly shift investor sentiment again. Markets, after all, rarely move in straight lines.
For now, though, ETFs offering international exposure are regaining prominence as investors reassess geographic allocations, suggesting that the era of unquestioned U.S. exceptionalism may at least be facing some healthy competition.
Photo: Shutterstock
Market News and Data brought to you by Benzinga APIs
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
