Preface

After a period of significant underperformance against the dominant U.S. stock market, international equities have emerged as a compelling opportunity. From late 2024, changes in macroeconomic conditions have catapulted these markets back into the spotlight, offering a lucrative chance for diversification away from the U.S.-focused portfolios. Investing experts suggest that now is not merely about chasing past performance but recognizing a structural shift that marks an inflection point for international growth.

Lazy bag

International equities are experiencing a revival. The opportunity to diversify your portfolio has never been stronger, driven by shifts in global growth dynamics and investor interest.

Main Body

Over the past decade, U.S. stocks consistently overshadowed global markets, causing many investors to shy away from overseas opportunities. This trend significantly changed in late 2024, where international equities began outperforming, driven by improving economic conditions globally and a realignment of investor focus.

Tim Seymour of Seymour Asset Management emphasizes that this is a long-term shift, not just a fleeting trend to capitalize on. Historically, the iShares MSCI ACWI ETF underperformed by 60%, illustrating the challenges international markets faced. However, a renewed optimism is emerging as these markets now present less risk of underperformance and more promise for consistent returns.

Investor portfolios have generally been U.S.-centric, with only 12–15% allocated to international markets despite the fact that global equities represent a significant portion of the total market. This discrepancy highlights the untapped potential for growth and diversification. A weakening U.S. dollar further incentivizes investors to consider overseas assets, boosting returns on investments made in foreign currencies.

Driven by earnings growth and favorable economic conditions, regions such as Japan and Europe are resetting investor expectations. Japan’s corporate reform and Europe’s favorable fiscal and regulatory environments lead to improved market outcomes. Banks, utilities, and industrial sectors within Europe are especially poised for growth, presenting attractive investment options.

Emerging market ETFs, particularly those tied to metal-rich territories in Latin America, have shown exceptional performance. Bolstered by commodity price surges, countries like Chile, Peru, and Brazil are outperforming, highlighting the robustness of international markets. The iShares MSCI Brazil ETF and the iShares MSCI Peru ETF illustrate these gains vividly, marking significant successes amidst the global economic recalibration.

Additionally, technology sectors in markets like South Korea are capturing investor interest. With dominant firms such as Samsung leading the charge, country-specific ETFs offer investors direct exposure to promising sectors.

Ultimately, the tide turning in favor of international equities represents a larger trend towards global market strategies. Experts assert that for long-term gains and portfolio balance, U.S. investors should now embrace these opportunities rather than remain narrowly focused on domestic options. By adjusting exposure to reflect global economic realities, investors may capitalize on the evolving international landscape.

Key Insights Table

Aspect	Description
Global Market Resurgence	International equities are seeing renewed interest due to improved economic conditions post-2024.
Portfolio Diversification	Opportunity for U.S.-centric investors to diversify and capitalize on international growth dynamics.

Last edited at：2026/1/30