Global Equities Ex-US Lead US Stocks in Performance this Year

Investors who have tilted their portfolios towards global equities ex-US have seen positive results this year, with ETFs showing solid performance through Tuesday's close (Sep. 9). However, leadership in foreign stocks is fading, and American shares are now leading the way.

Investors who have tilted their portfolios towards global equities ex-US have seen positive results this year, with ETFs showing solid performance through Tuesday's close (Sep. 9). However, leadership in foreign stocks is fading, and American shares are now leading the way. This shift is largely attributed to the robust performance of U.S. technology and financial sectors, which have been boosted by strong economic indicators and favorable regulatory environments.

The U.S. technology sector, particularly in AI and semiconductor markets, has seen significant growth. Broadcom (NASDAQ: AVGO), a key player in AI infrastructure, reported a 22% year-over-year increase in revenue for the third quarter of fiscal 2025, with AI semiconductor sales rising 63% 2 Top AI Growth Stocks to Buy in September^[2]. Similarly, Meta Platforms (NASDAQ: META), a global AI powerhouse, saw its revenue climb 22% year-over-year in the second quarter of fiscal 2025, driven by massive investments in AI infrastructure and expanding app ecosystems 2 Top AI Growth Stocks to Buy in September^[2].

In contrast, the performance of foreign stocks has been less impressive. The U.S. Securities and Exchange Commission (SEC) has delayed decisions on several ETFs, including Grayscale’s Hedera and Bitwise’s Dogecoin ETFs, which could have provided investors with exposure to promising cryptocurrencies Grayscale seeks SEC approval to convert Bitcoin Cash, Hedera, and Litecoin Trusts into ETFs^[1]. The delay in approvals has contributed to a slowdown in the growth of foreign stock ETFs.

Additionally, the U.S. financial sector has shown resilience, with strong earnings reports and robust economic indicators supporting American shares. The Federal Reserve's monetary policy and the overall economic recovery have been favorable for U.S. stocks, contributing to their leadership in the global market.

Despite the positive performance of U.S. stocks, investors should remain vigilant and diversify their portfolios to mitigate risks associated with market volatility and sector-specific challenges. The ongoing regulatory environment for cryptocurrencies and the potential impact of global economic conditions on foreign stocks are factors to consider.

In conclusion, the shift in leadership from foreign to American stocks is a reflection of the strong performance of U.S. technology and financial sectors. However, investors should continue to monitor market trends and make informed decisions to optimize their portfolios.