These Global ETFs Outperform the S&P 500: Here’s How to Gain Exposure

These international ETFs are beating the S&P 500. How to add exposure

Beyond Borders: The Case for International Investing in 2025

As the global economic landscape continues to evolve, U.S. investors are faced with unique challenges and exciting opportunities. President Donald Trump’s tariff policies have created ripples of uncertainty, pushing returns outside the United States into the spotlight. Here at Extreme Investor Network, we believe that diversifying your portfolio internationally can not only mitigate risk but also open doors to remarkable growth potential. Here’s why expanding your horizon could be your best investment move for 2025.

Global ETFs: A Strong Performance in 2025

While the S&P 500 has shown marginal positivity this year, several region-specific exchange-traded funds (ETFs) are reaping impressive returns.

  • iShares China Large-Cap ETF (FXI): up 15.8%
  • iShares Europe ETF (IEV): up 20.8%
  • iShares MSCI Mexico ETF (EWW) and iShares Canada ETF (EWC) are also demonstrating double-digit gains.

These figures reveal a striking contrast to domestic outcomes— a trend worth paying attention to as the dollar’s value declines amid ongoing tariff discussions.

According to recent rulings from the U.S. Court of International Trade, the administration’s efforts to impose "reciprocal" tariffs may have overstepped legal boundaries. Such developments could mean that uncertainty will hang over U.S. markets longer than anticipated.

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Lessons Amidst Uncertainty: The Importance of Global Exposure

While U.S. companies have historically led the charge in the economic landscape, circumstances are shifting. Callie Cox, our strategist at Extreme Investor Network, emphasizes that "conditions change." The U.S.’s dominance is not guaranteed, and to navigate this evolving environment, it’s vital to consider broadening your investment strategy.

U.S. investors typically exhibit home bias— a dangerous trend. Industries like technology have soared in the past years, leading to concentrated holdings that may not be as secure as they appear. It’s crucial to recognize that diversification isn’t just wise; it’s necessary for long-term financial health.

Why Diversification Matters

Investing internationally can provide numerous benefits. For one, different sectors dominate global markets. While tech reigns in the U.S., banks and other industries are more significant players overseas. This sectoral variation can shield you from swings in any single economy.

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Moreover, currency diversification acts as a financial hedge. Higher inflation in the U.S. could cause the dollar to weaken, making your international assets more valuable in comparison.

How Much International Exposure is Right for You?

There’s no one-size-fits-all answer, but our research at Extreme Investor Network suggests a balanced approach. A 60/40 split between U.S. and non-U.S. investments is a solid starting point. Venture beyond 30% in international assets, and you may risk diminishing your exposure to U.S. market performances—a critical element for most investors.

Jon Aliaga-Diaz, Vanguard’s chief economist, advises against allowing your U.S. exposure to exceed 70%. "Chasing performance can lead to problematic blind spots," he cautions.

Broad Over Specific: Avoid Picking Winners

The current landscape is fraught with uncertainty, making it challenging to predict which international markets will emerge as winners. Rather than trying to outguess the market, focus on broad exposure through diversified ETFs like:

  • Vanguard FTSE All-World ex-U.S. ETF (VEU)
  • iShares Core MSCI Total International Stock ETF (IXUS)
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Both have nearly 14% year-to-date returns, offering broader market engagement without the stress of pinpoint targeting.

Conclusion: Invest Smart, Think Global

As you navigate the shifting tides of the investment landscape, consider elevating your strategy by incorporating international assets. This approach not only enhances diversification but also positions you well for a future where global economic trends increasingly impact local markets.

At Extreme Investor Network, we’re committed to equipping you with the knowledge and tools needed to make informed decisions. As you rethink your investment strategy for 2025, remember: broadening your investment footprint could be more than smart— it might just be essential.

Invest wisely, and let’s unlock the global potential together!