After spending most of the past decade being trounced by the U.S. stock market, international equities are back and investing experts say the opportunity should last.
A brutal stretch of underperformance that lasted a decade ended in late 2024 and has sustained its momentum at the outset of 2026. After years of global allocations staying low for most U.S.-based investors because of the weak returns, the recent gains amid shifting macro conditions and growing concerns about U.S. market concentration are leading investors to take another look at the lack of international exposure in their portfolios.
It is not merely chasing hot recent performance, according to Tim Seymour, Seymour Asset Management chief investment officer, who is also a portfolio manager on the Amplify CWP International Enhanced Dividend Income ETF (IDVO). “This is not people saying … this is a time to trade global markets,” he said on this week’s CNBC’s “ETF Edge.”
Over the last ten years, global equities outside of the U.S. underperformed domestic markets by a wide margin, with Seymour noting that a major world equities benchmark ETF, the iShares MSCI ACWI ETF (ACWI), underperformed by about 60%. That gap shaped investor behavior and capital flowed into U.S. equities, particularly mega-cap technology stocks. Seymour described it as a generational dynamic among investors in which market capitalization growth in the U.S. “choked off a lot of international investing.”
But he says now the structural underweight that many U.S. investors have to global markets is a tailwind. While international equities represent roughly 30-40% of global market capitalization, Seymour estimates that at the high-end of the range, U.S. investor exposure to overseas markets is 12-15%, and in many cases much lower.
International equities began to outperform the U.S. in November 2024, and since that turn have beaten U.S. equities by roughly 15%, Seymour said. While that does not erase the decade of lagging returns, it marks a meaningful inflection point. “In a 14-month span, you’ve seen international outperform the U.S.” Seymour said. While the ten-year chart versus the U.S. stock market still looks poor, “it really is a story of where global growth has picked back up,” he added.
A popular exchange-traded fund choice among many U.S. investors to gain international exposure is the iShares MSCI Emerging Markets ETF (EEM), which has $26.55 billion in assets and has returned 42% over the past year. The iShares MSCI ACWI ETF is up 20% over the past year, besting the S&P 500’s return by about 5%. Seymour said while the potential returns from emerging markets are higher, investors who are looking to diversify overseas should tilt more heavily to developed market allocations, citing a 70%-30% split as a reasonable example.
Part of the renewed interest in overseas markets is tied to currency. A weakening U.S. dollar has improved returns for dollar-based investors holding foreign assets. Meanwhile, metals have…
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