International equities began to outshine U.S. stocks in November 2024 and have since surpassed their U.S. counterparts by approximately 15%, according to Tim Seymour. This marks a pivotal shift, although it doesn't fully compensate for the past decade of subpar returns. "In a 14-month span, international stocks have outperformed U.S. equities," Seymour noted, adding that despite a lackluster ten-year comparative chart against the U.S. stock market, it indicates a resurgence in global growth.
Seymour highlights that U.S. investors' historically low exposure to international markets now serves as a beneficial factor. While international stocks account for roughly 30-40% of global market capitalization, Seymour estimates U.S. investor exposure to these markets is only 12-15%, often even less.
For much of the last decade, global equities outside the U.S. underperformed significantly, with a major world equities benchmark ETF, the iShares MSCI ACWI ETF (ACWI), lagging by about 60%. This gap drove investors towards U.S. equities, particularly in the tech sector, creating what Seymour describes as a generational shift where U.S. market cap growth "choked off a lot of international investing."
However, the recent surge is not just a result of chasing short-term gains, asserts Seymour, Seymour Asset Management's chief investment officer and a portfolio manager at the Amplify CWP International Enhanced Dividend Income ETF (IDVO). "This is not a short-term trading strategy in global markets," he stated on CNBC's "ETF Edge."
A decade-long period of underperformance concluded by late 2024, and the positive momentum has continued into early 2026. Following years of low international allocations due to weak returns, investors are reconsidering their portfolios amid changing macro conditions and concerns about U.S. market concentration.
As international stocks regain footing, investment experts suggest the opportunity should persist. A favored ETF among U.S. investors for international exposure is the iShares MSCI Emerging Markets ETF (EEM), which manages $26.55 billion in assets and gained 42% last year. The iShares MSCI ACWI ETF increased by 20%, outpacing the S&P 500 by about 5%. Seymour advises investors seeking overseas diversification to focus more on developed markets, suggesting a 70%-30% split as prudent.
The renewed international interest also ties to currency dynamics, as a weaker U.S. dollar enhances returns for dollar-based investors with foreign assets. Furthermore, metals have surged as investors seek alternatives to U.S.-sole investments, with Seymour noting this as a global trend.
"These factors momentum alongside a weakening dollar, encouraging investors to diversify their traditionally U.S.-centric portfolios," remarked Jon Maier, chief ETF strategist at J.P. Morgan Asset Management, on "ETF Edge."
Seymour emphasizes that improving fundamentals are critical when considering international equities. Areas that once stagnated now exhibit earnings growth. Japan exemplifies this change, where corporate governance reforms and shareholder advocacy are beginning to yield positive results.
Europe is also benefiting from lower interest rates, increased fiscal spending, and regulatory adjustments. Seymour believes deregulation in Europe could be a more potent catalyst than similar initiatives elsewhere, as the region undergoes strategic changes.