International Equities Reach 38% Share as ACWI ETF Logs 10-Week Rally
Between 2009 and late 2024, the S&P 500 outpaced international stocks by over 280%, but the iShares MSCI ACWI ex U.S. ETF has surged for 10 consecutive weeks—its longest rally ever. International equities now account for 38% of the $97 trillion global market, and strategists forecast they will outperform U.S. stocks in the late 2020s.
1. Shift Toward International Equities
International stocks have recovered to 38% of the $97 trillion global equity market, up from 33% at the end of 2024, suggesting a renewed leadership role outside the U.S. This marks a reversal from the decade-long dominance of U.S. mega-cap technology companies.
2. Historical Outperformance by S&P 500
From 2009 through late 2024, the S&P 500 outperformed the iShares MSCI ACWI ex U.S. ETF by over 280%, driven by a strong U.S. dollar and rapid growth in technology and platform firms. That gap now appears set to narrow as global fiscal expansion and inflationary pressures take hold.
3. Record ETF Rally Streaks
The iShares MSCI ACWI ex U.S. ETF has climbed for 10 straight weeks—a first in its history—while the iShares MSCI Emerging Markets ETF has posted nine consecutive weekly gains, its longest streak since 2005. The MSCI Emerging Markets ex China ETF has also outperformed the S&P 500 ETF for 10 straight weeks.
4. Structural Drivers Behind Rotation
A blend of fiscal stimulus, geopolitical fragmentation and the end of broad-based deflation favors manufacturing-heavy and resource-rich economies. AI disruption threatens U.S. service-sector margins, potentially giving an edge to overseas markets focused on industrials and natural resources.