Don’t shoot the messenger, but the U.S. stock market’s rally to all-time highs this year pales in comparison when compared to gains being recorded across many international equity markets. Most notably, ETFs representing Greece and Poland are up 58% and 55%, respectively, in 2025—blowing past the 7% gain the benchmark S&P 500 ETF (SPY) has posted during the same time period.
Although the U.S. stock market has historically outperformed its international peers since the end of the Great Recession, cheaper valuations abroad, the U.S.’s higher-for-longer interest rate policy, and the appeal created by the weaker U.S. dollar are pushing some investors to look overseas. Luckily, top brokers for international trading make it very easy to invest globally.
Key Takeaways
- Global stocks are outperforming U.S. equities in 2025—a rare occasion, historically.
- Key factors contributing to the U.S. market’s underperformance are interest rate policy divergence, dollar weakness, and relative valuation gaps.
- Popular online brokers for international trading offer several ways to get international exposure including via ETFs, mutual funds, and some less common investment vehicles.
Why Are U.S. Stocks Lagging Behind in 2025?
The U.S. equity market is in somewhat unusual territory this year, when it comes to how it’s performing compared to international peers. Sure, Wall Street darlings like Nvidia and Microsoft are shining in 2025 with year-to-date (YTD) gains 29% and 21%, respectively, but the same can’t be said about the broader U.S. market. Consisting of 500 of the largest publicly traded companies in the U.S., the S&P 500’s YTD gain is just 7%. By contrast, the MSCI All-World ex U.S. Index (ACWX), which consists of a basket of developed and emerging global stocks and excludes U.S. companies, is up 17% in 2025.
But why are U.S. stocks showing such uncharacteristic underperformance? Well, there are several macroeconomic factors at play:
- Monetary headwinds: Higher-for-longer interest rates, tighter Fed policy, slower earnings growth.
- Valuation fatigue: U.S. stocks, especially in ‘hot’ tech and growth sectors, had very high valuations coming into 2025. As a result, more capital began flowing into undervalued international markets (especially Europe and emerging Asia).
- Currency headwinds: The U.S. dollar’s sharp decline throughout much of this year is boosting foreign stocks by increasing the dollar value of foreign earnings, which is making exporting economies in particular more competitive.
How Rare Is This Global Outperformance?
This year’s shift in favor of global equities is not unprecedented, but it certainly is more of an outlier, at least since the Great Recession. As the graphs below shows, international stocks have enjoyed cycles of outperformance during this period, but long-term, U.S. equities have delivered superior returns, driven by consistent earnings growth, innovation leadership, flexible labor markets, and a host of other favorable variables.
Whenever global equities do experience periods of relative outperformance, like in 2022, 2017, and 2012, they tend to coincide with policy divergence, valuation normalization, and sector rotation away from U.S. growth.
How You Can Invest in Global Stocks and ETFs
If you are looking to tap into international markets, top-ranked brokers for international trading offer you a number of ways to do so:
- American Depository Receipts (ADRs): ADRs let U.S. investors buy shares in foreign companies without dealing with foreign stock exchanges. They’re issued by U.S. banks and represent a specific number of shares in a non-U.S. company. You trade them just like regular U.S. stocks, in U.S. dollars, with dividends also paid in the USD.
- Global Depository Receipts (GDRs): GDRs are similar to ADRs, but these shares of foreign companies trade on international exchanges, not just in the U.S. Investors in different parts of the world can buy into these companies through GDRs.
- Global Mutual Funds: Global mutual funds invest in both U.S. and international stocks, offering broad geographic diversification within one fund. They’re managed by professionals who handpick companies across developed and emerging markets.
- International Exchange-Traded Funds (ETFs): International ETFs track indexes made up of non-U.S. companies—think Japan, Germany, or emerging markets like India or Brazil. Like all ETFs, they trade on U.S. exchanges and can be bought and sold throughout the trading session.
- Multinational Corporations (MNCs): MNCs are companies that operate in more than one country—think Apple, Nestlé, or Toyota. Even if they’re based in one country, a big chunk of their sales and profits may come from international markets. Investing in MNCs gives you indirect exposure to global growth.
The Bottom Line
Historically, the U.S. stock market has been very tough to beat—tough, but not impossible, and 2025 appears to be one of those rare cases. With multiple international markets posting strong gains, as investors, it behooves us to remain informed about what presents the best opportunities for our portfolios. If you’re interested in gaining exposure to international equities because you believe the leadership they’ve shown in 2025 can continue, the best online brokers for international trading have everything you need to conduct research and invest.