International equities have had a strong start to 2025. The top-performing nonleveraged ETFs YTD include numerous funds focused on non-U.S. equities. That likely owes to a significant dip for U.S. stock markets through 2025 so far amid tariff-related uncertainty. Foreign firms, then, could present a strong set of opportunities for investors looking at that foreign diversification and upside. A value ETF approach, specifically, could help identify those foreign firms poised to benefit from a shift toward international.
See more: International Small-Cap ETF AVDV AUM Up $1 Billion YTD
Why might international equities be doing so well? With U.S. stock valuations at or near historical highs, a correction could be looming. Perhaps more relevant, however, are potential tariffs and fears around U.S. government debt and policy. Related volatility has seen the U.S. stock market take a quite a hit, making foreign equities look good by comparison.
International Equity ETF AVIV
Meanwhile, it’s important to note that even though they have underperformed the U.S., international equities have their own merits. U.S. stocks have dominated investing for years, but that has not always been true. The World ex USA Index performance outpaced the U.S. return, as indicated by the MSCI USA Index, between 2002 and 2011, per Avantis Investors analysis.
The current turn toward international equities could represent a secular shift back toward ex-U.S. investments. But for now, investors can use ETFs to add some exposure. The value ETF AVIV could provide a particular type of exposure that can outpace rival international equity funds.
The Avantis International Large Cap Value ETF (AVIV ) charges a 25 basis point fee to actively invest in non-U.S. developed market equities. AVIV leans on fundamental analysis, scrutinizing firms to find those trading at lower prices relative to book value ratios. What’s more, it considers data like cash flows and shares outstanding to identify those high-profitability value names.
That has helped AVIV return 9.5% YTD, per YCharts data. That outperformed the MSCI ACWI Ex USA Net Total Return index in that same time frame. A value option could provide a way to identify firms poised to do well amid potential future uncertainty.
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