To say 2025 brought a resurgence by international stocks and the related ETFs is an understatement. With just over a month left in the year, it’s clear both developed and emerging market stocks will beat the S&P 500 and likely by comfortable margins at that. So what does 2026 have in store?
Count the WisdomTree International Equity Fund (DWM ) among international ETFs delivering impressive showings in 2025. As of Nov. 20, DDWM, which is a developed markets ETF, was beating the S&P 500 by a margin of more than 2-to-1. In terms of more direct comparisons, DWM is beating the widely observed MSCI EAFE Index by 300 basis points. Additionally, it is sporting less annualized volatility than the developed markets gauge.
Impressive data points to be sure, but they’re also about to be old news. It’s appropriate for advisors and investors to ponder what 2026 has in store for ex-US stocks and ETFs like DWM. Only time will reveal that answer. However, there’s good news for market participants considering assets like DWM. Professional investors are constructive on international equities heading into 2026.
DWM Can Do It Again in 2026
Investors evaluating DWM for 2026 portfolio inclusion ought to consider the findings in Bank of America’s Global Fund Manager Survey for November. Forty-two percent of professional investors polled said they think international stocks will be the top-performing asset class next year. This is nearly double the 22% that said the same of domestic equities.
“Global rebalancing theme outperformed U.S. exceptionalism as U.S. trade, industrial and geopolitical policies spurred lower oil prices and new fiscal stimulus in China, Europe, and Japan,” said Michael Hartnett, chief investment strategist at Bank of America.
The $602.3 million DWM, which turns 20 years old next June, has some other advantages. Despite what’s clearly been impressive performance this year, many of the markets represented in the fund don’t fit the bill as overbought.
Most Overbought Equity Markets
Bank of America points out that as measured by the largest ETFs addressing the nations, the countries with the most overbought equity markets are South Korea, South Africa, Brazil, Spain, and Taiwan. Of that quintet, only Spanish stocks reside in DWM and to the tune of just 5.91%.
On a related note, 10% of the pros surveyed by Bank of America said Japan’s Nikkei will be the world’s best-performing equity gauge next year. That’s pertinent to investors considering DWM. If that thesis proves accurate, DWM would benefit. It allocates nearly a quarter of its weight to Japanese stocks – by far its biggest country exposure.
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