International Equities: A Strong Start to 2025
The global economy has shown signs of resilience and growth in the opening months of 2025. One notable area of strength has been the performance of international equities. Non-U.S. markets have outpaced their American counterparts, with numerous non-leveraged Exchange-Traded Funds (ETFs) leading the charge.
Top-Performing Non-Leveraged ETFs Year-to-Date
According to recent market data, some of the top-performing non-leveraged ETFs year-to-date include:
- iShares MSCI ACWI ex Japan ETF (ACWX): With a year-to-date return of over 10%, this ETF tracks the performance of developed and emerging market equities, excluding Japan.
- Vanguard FTSE All-World ex-US Index Fund (VEU): Another strong performer, VEU has seen a return of nearly 10% this year. This ETF tracks the FTSE All-World ex-US Index, which covers approximately 99% of the market capitalization of developable markets.
- iShares MSCI Emerging Markets ETF (EEM): EEM, which focuses on emerging market equities, has seen a return of around 8%. This ETF tracks the MSCI Emerging Markets Index.
Why the Surge in International Equities?
Several factors have contributed to the strong performance of international equities. One key factor is the global economic recovery from the pandemic. Many countries have successfully managed to contain the spread of the virus, allowing for a rebound in economic activity.
Another factor is the continued strength of the U.S. dollar. A weaker dollar makes foreign assets more attractive to investors, as the returns on those assets appear to be higher when converted back to dollars.
Additionally, some experts believe that the shift towards a more digitally-driven economy has benefited non-U.S. markets. Many emerging markets, particularly in Asia, have been at the forefront of this trend.
Impact on Individuals
For individual investors, the strong performance of international equities could mean potentially higher returns on their investments. However, it is important to remember that investing in international markets carries additional risks, such as political instability and currency fluctuations.
Those considering investing in international equities should do their due diligence and consult with a financial advisor. Diversification is also key, as spreading investments across various asset classes and geographic regions can help mitigate risk.
Impact on the World
The strong performance of international equities could have a positive impact on the global economy as a whole. Increased investment in emerging markets, in particular, could lead to greater economic growth and development.
However, it is important to note that the economic recovery from the pandemic is not evenly distributed across the globe. Some countries are still facing significant challenges, and continued global cooperation and support will be necessary to ensure a sustainable and inclusive recovery.
Conclusion
The strong start to 2025 for international equities is a positive sign for the global economy. With numerous non-leveraged ETFs leading the charge, investors have a number of options for gaining exposure to international markets. However, it is important to remember that investing in international equities carries additional risks, and careful consideration and diversification are key.
The impact of this trend on individuals and the world as a whole remains to be seen. Continued economic growth and development in emerging markets could lead to a more equitable and sustainable global economy. However, ongoing challenges, particularly in the wake of the pandemic, will require continued cooperation and support from the international community.
