International Equities on the Rise: A New Chapter in Global Investing

In a striking turnaround, international equities have begun to reclaim their place in the investment landscape after a decade of lagging behind the U.S. stock market. As we enter 2026, it’s clear that the dynamics of global investing are shifting dramatically, and this resurgence presents both opportunities and challenges for investors.

A Decade of Underperformance

For most of the past ten years, global equities outside the U.S. faced significant headwinds, underperforming their domestic counterparts by a staggering 60%. This prolonged struggle led many U.S. investors to retreat into the relative safety of U.S. stocks, particularly mega-cap technology companies. Tim Seymour, Chief Investment Officer at Seymour Asset Management, aptly describes this trend as a “generational dynamic” that has constrained international investing.

Current Landscape: A Shifting Tide

However, the narrative is changing. Since November 2024, international equities have outperformed U.S. stocks by approximately 15%, marking a significant inflection point. This shift can be attributed to several key factors:

• Structural Underweight: Many U.S. investors have a mere 12-15% exposure to global markets, despite international equities comprising around 30-40% of global market capitalization.
• Currency Influence: A weakening U.S. dollar has enhanced returns for dollar-based investors holding foreign assets.
• Improving Fundamentals: Earnings growth is emerging in regions that have historically faced stagnation, notably Japan and parts of Europe.

Investment Opportunities: ETFs to Consider

For those looking to diversify internationally, ETFs like the iShares MSCI Emerging Markets ETF (EEM), which has returned 42% over the past year, offer compelling options. Seymour emphasizes that while emerging markets may promise higher returns, investors should consider a balanced approach, allocating more to developed markets, perhaps a 70%-30% split.

Regional Highlights: Where to Look

Investors should pay attention to specific regions that are currently thriving:

• Latin America: Nations like Chile and Peru are benefiting from rising commodity prices. The iShares MSCI Brazil ETF (EWZ) is up nearly 49% over the past year, while the iShares MSCI Peru ETF (EPU) has skyrocketed by 118%.
• Europe: Eurozone countries are experiencing a boost from lower interest rates and regulatory changes that could outpace similar moves in the U.S.
• Asia: South Korea’s stock market, heavily reliant on memory chip producers like Samsung, has surged 125% in the last year, highlighting the strength of technology stocks outside the U.S.

Conclusion: A Call to Action for Investors

The renewed interest in international equities signals a crucial shift in investment strategy. As global capital flows become more pronounced, it’s vital for investors to reassess their portfolios and consider the diversification benefits that international markets provide. The fundamentals are improving, and with the right approach, investors can capitalize on this emerging trend.

For those wanting to dive deeper into this topic and explore the original insights, I encourage you to read the full article [here](https://www.cnbc.com/2026/01/30/overseas-markets-international-stocks-investing-etfs.html).