For the better part of a decade, investing internationally felt like the financial equivalent of ordering salad at a steakhouse—technically an option, but why would you? US stocks simply steamrolled everything else. But 2025 threw us a curveball. Global equities came roaring back, and suddenly, ETFs tracking international stocks are getting the attention they haven't seen in years.

The numbers tell the story: the Morningstar Global Markets ex-US Index jumped about 32% in 2025, nearly doubling the 17% return of the US market benchmark. That's not just a good year for international stocks—it's the kind of performance that makes investors wonder if the playbook is changing.

The ETFs Leading the Charge

Broad international funds have been the obvious winners here. Take the SPDR Portfolio Developed World ex-US ETF (SPDW), which holds over 2,300 developed-market stocks excluding US companies. It climbed more than 30% over the past year. With exposure to global heavyweights like Samsung Electronics, ASML Holding (ASML), and Roche, it sits right in the sweet spot of this international recovery story—all while charging very low fees.

Then there's the iShares MSCI ACWI ex US ETF (ACWX), which gained 34% over the past year. That's more than double the 14.7% increase posted by the State Street SPDR S&P 500 ETF Trust (SPY) during the same stretch. When you're beating SPY by that margin, people notice.

Value-focused global strategies are also drawing eyeballs. The JPMorgan International Value ETF (JIVE) surged more than 46% in that period, tapping into investor appetite for cheaper valuations outside American borders.

Funds like the BNY Mellon International Equity ETF (BKIE), which offers diversified exposure to nearly 1,000 foreign stocks at a low cost, have been picking up steam. Meanwhile, income-focused investors have gravitated toward dividend-oriented strategies such as the Amplify CWP International Enhanced Dividend Income ETF (IDVO), which holds higher-yielding global companies including Alibaba Group Holding Ltd (BABA), Novartis (NVS), and Taiwan Semiconductor Manufacturing Co Ltd (TSM).

What's Actually Driving This Shift

Currency dynamics played a major role. A softer US dollar—posting its sharpest half-year decline since the early 1990s—gave a nice boost to dollar-based investors holding overseas assets. When the dollar weakens, those international returns get a translation bump on the way back home.

At the same time, international markets caught some genuine tailwinds. Economic momentum improved across both developed and emerging regions, and investors started paying attention.

Europe led much of the rally, helped by fiscal stimulus and a rebound in financial stocks. Spain's IBEX 35 jumped around 50% last year, while Germany's DAX rose roughly 23%. Those aren't small moves for major European indices.

Emerging markets added fuel to the fire. The MSCI Emerging Markets Index returned about 34% in 2025, with South Korea benefiting from its central role in the AI hardware supply chain. Brazil and Mexico also advanced on shifting global trade dynamics, finding opportunities in a changing landscape.

Is This Real or Just a Head Fake?

The big question: is this a temporary blip or something more durable? Strategists are increasingly leaning toward the latter. Forecasts point to continued dollar softness, and international equities still trade at a sizable valuation discount relative to US stocks. "Opportunity still exists in developed ex-U.S. financials given still deep valuation discounts," noted a JPMorgan report from late last year. Higher dividend yields abroad also strengthen the case for diversification.

That said, calling the end of US market leadership feels premature. American tech giants still dominate their industries, and global risks—from geopolitical tensions to currency volatility—could quickly shift investor sentiment back the other way. Markets rarely move in straight lines, and betting against US stocks has been a losing trade for a long time.

For now, though, ETFs offering international exposure are having a moment. Investors are reassessing their geographic allocations, and the assumption of unquestioned US exceptionalism is at least facing some serious competition. Whether this marks a genuine turning point or just a temporary rotation remains to be seen, but either way, it's refreshing to see the rest of the world getting some love.