Global Investing: Why 2025 Could be the Year for International Stocks

A Shift in Market Leaders

As the global market increasingly shifts its gears, 2025 emerges as a pivotal year for investors looking beyond domestic borders. Recent trends indicate that U.S. stocks, particularly those in large-cap indexes, are starting to trail behind their international peers. According to The Motley Fool, the first nine months of 2025 have seen the MSCI World Index outpace the S&P 500, signaling an opportunity for savvy investors to look at international stock markets as potential leaders in their portfolios.

The Case for International Diversification

With U.S. equities consistently delivering robust performance over the past decade, many investors have become accustomed to their reliable returns. However, diversification remains key to managing risk and capturing potential global opportunities. Leveraging Exchange-Traded Funds (ETFs) such as the Vanguard Total International Stock ETF, investors can access a broad range of international equities with lower costs and reduced volatility. These ETFs provide a robust way to gain exposure to international markets, making them an essential tool for contemporary investment strategies.

Spotlight on Vanguard Total International Stock ETF

The Vanguard Total International Stock ETF (VXUS) mirrors the FTSE Global All Cap ex US Index, offering exposure to over 8,700 stocks worldwide. With significant allocations in Europe, the Pacific, and emerging markets, it diversifies assets across different geographies, mitigating market-specific risks. For investors committed to a cost-effective approach, this ETF’s low expense ratio adds appeal, allowing them to maximize returns over the long term.

Embracing European Opportunities: Vanguard FTSE Europe ETF

For those particulary inclined toward the European markets, Vanguard’s FTSE Europe ETF peers into the continent’s diverse economic tapestry. This ETF’s portfolio encompasses over 1,200 stocks, capturing thriving economies from the UK to Germany. With the ETF’s growing return rates, international investors gain access to dynamic European sectors without incurring substantial costs.

Coverage of Asia and Beyond: iShares Core MSCI EAFE ETF

The iShares Core MSCI EAFE ETF taps into developed markets outside the United States and Canada. Notably, Japan, the UK, and European nations dominate its holdings, offering exposure to industrial, healthcare, and financial sectors. These strategic allocations have yielded impressive returns, making it a valuable component for robust, diversified portfolios.

Investing with Insight

For investors like Lawrence Rothman, identifying and seizing this moment could redefine investment strategies for the coming years. With global economies interconnected yet distinctive, embracing international equities can be both a strategic and rewarding choice. As stocks worldwide present new narratives of growth and resilience, venturing into international waters could just be the timely benchmark for ambitious investors in 2025.