Missing Foreign Stock Run in 2025? Still market money to be made overseas

After being smothered by the US stock market for most of the past decade, international shares are back and investment experts say the opportunity must last.

A brutal decade-long stretch of underperformance ended at the end of 2024, maintaining its momentum against the outlook for 2026. After years of global allocations remaining low for most US-based investors due to weak yields, the recent gains amid shifting macro conditions and growth concerns about US market concentration lead investors to take another look at the lack of international exposure in their portfolios.

According to Tim Seymour, chief investment officer of Seymour Asset Management, who is also a portfolio manager on the Amplify CWP International Enhanced Dividend Income ETF (IDVO). “It’s not people saying … this is a time to trade global markets,” he said on this week’s CNBC.Edge ETF“

Over the past ten years, global equities outside the US have underperformed domestic markets by a wide margin, with Seymour noting that a major global equity benchmark ETF, the iShares MSCI ACWI ETF (ACWI)underperform by around 60%. That gap shaped investor behavior and capital flowed into US stocks, particularly mega-cap tech stocks. Seymour described it as a generational dynamic among investors in which market capitalization growth in the US “stifled a lot of international investment.”

But he now says the structural underweight that many US investors have against global markets is a tailwind. While international stocks represent about 30-40% of global market capitalization, Seymour estimates that US investor exposure to overseas markets is at the high end of the range 12-15%, and in many cases much lower.

International stocks began outperforming the U.S. in November 2024, and since that turn, U.S. stocks have beaten about 15%, Seymour said. While this doesn’t erase the decade of lagging returns, it is a significant inflection point. “In a 14-month period, you’ve seen international outperform the US,” Seymour said. While the 10-year chart against the US stock market still looks weak, “it’s really a story of where global growth has picked up,” he added.

A popular exchange-traded fund choice among many US 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, outperforming the S&P 500’s return by about 5%. Seymour said that while the potential returns from emerging markets are higher, investors looking to diversify overseas should lean more towards developed market allocations, with a 70%-30% split as a reasonable example.

Part of the renewed interest in overseas markets is linked to currency. ON weakening US dollar have improved returns for dollar-based investors holding foreign assets. Meantime, metals came into being as investors look for stores of value, an investment development that Seymour described as a global trade rather than a US-only phenomenon.

“These all provide tailwinds and a weakening dollar, of course, where it leads investors to diversify their overall portfolios that were previously US-centric,” Jon Maier, JP Morgan Asset Management ETF strategist, said on “ETF Edge.”

Seymour said the most important point for investors to understand when considering adding international stocks to a portfolio is that fundamentals are improving. Earnings growth is occurring in places where stagnation once determined the outlook. Japan is a key example, he said, where years of corporate governance reform and shareholder focus start boosting yields.

Europe also benefits from lower interest rates, fiscal spending and regulatory change. Seymour argued that deregulation in Europe may be a more powerful catalyst than similar efforts in the US because it represents a sharper shift from the past. Banking, utilities and industrials all experienced renewed momentum. He added that in addition to a decade of underperformance making these stocks cheap on a relative basis, many European bank stocks will benefit as much from central bank policy as US banks and better dividend playsuch as Barclays, Santander and SocGen.

Maier echoed this general view, saying that “developed international markets are certainly areas of interest to our clients.”

International markets also provide exposure to recent winning industries including precious metals. Latin America was one of the strongest performing regions this year, driven by gold and copper. Seymour said Chile and Peru are examples of international markets benefiting from rising demand for commodities. Meanwhile, Brazil has gained on both commodity strength and shifting political expectations.

“Brazil is the largest economy in Latin America,” Seymour said. “Some of these are the dynamics around commodities, but some of these are the dynamics around geopolitics.”

The iShares MSCI Brazil ETF (EWZ)which has $8.91 billion in assets, has risen nearly 49% over the past year, while the iShares MSCI Peru and Global Exposure ETF (EPU) is almost 118% higher in the same period.

The dollar and metal deals came under pressure on Friday after President Trump announced Kevin Warsh as his pick to succeed Jerome Powell as Fed chairman, with market faith in Warsh as a figure who would maintain Fed independence rather than dictate rates at the president’s bidding. Gold, silver and platinum everyone crashed. However, these metals have seen enormous returns over the past year, with gold up over 90%, silver up around 200% and platinum up 120%.

Market strategists say Trump administration global policies will continue to serve as long-term tailwinds for international-themed trades. “Whether it’s India and the EU striking a trade deal or Canada cutting oil deals with China, the rest of the world is repositioning,” Seymour said.

Technology leadership is another trade where investors are reconsidering the balance between US and overseas holdings. Seymour highlighted South Korea as an example, noting that the country’s market has been heavily weighted towards memory chip leaders such as Samsung and SK Hynixwhich accounts for about 46% of the South Korean stock market benchmark used by the iShares MSCI South Korea ETF (EWY)which has increased by 125% in the past year. “Memory has been on fire,” he said, making country ETFs a practical way to gain exposure. Apple said this on its earnings call on Thursday cannot secure enough chips for iPhone requestAnother sign supporting the strength of the memory trade.

Seymour noted that other companies that are among the largest chip players in the world, ASML and Taiwan Semialso live outside the US, and there are also many data centers playing overseas.

The renewed interest in international stocks reflects broader reallocation after years of neglect. Investors are reacting to valuation gaps, earnings growth and a world where capital and trade are increasingly directional. “This is global trade, not just American trade,” Seymour said.