Best-Performing Country ETFs of 2025

Core Insights - Wall Street faced significant volatility in 2025, while international markets showed stability or growth, driven by trade uncertainties under Trump's administration impacting the U.S. economy more severely than international markets [1] U.S. & International ETF Performance - Roundhill Magnificent Seven ETF (MAGS) increased by 25.5%, SPDR S&P 500 ETF Trust (SPY) rose by 18.1%, Invesco QQQ Trust (QQQ) gained 22.3%, and SPDR Dow Jones Industrial Average ETF Trust (DIA) advanced 14.9% in 2025 [2] - Vanguard Tax Managed Fund FTSE Developed Markets ETF (VEA) increased by 31.6%, iShares Asia 50 ETF (AIA) surged by 44%, iShares MSCI Emerging Markets ETF (EEM) rose by 31.2%, iShares MSCI Eurozone ETF (EZU) jumped by 37.4%, and iShares MSCI ACWI ex US ETF (ACWX) grew by 29.7% [3] Drivers of International ETFs - U.S. tech stocks, particularly the "magnificent seven," faced overvaluation concerns, impacting tech-centric indexes negatively, while European markets like STOXX Europe 600 benefited from a more balanced structure with top 10 stocks comprising only 17% of the index [4][5] - International markets were generally undervalued compared to U.S. stocks, with EZU's P/E ratio at 17.83X compared to Vanguard S&P 500 ETF (VOO) at 29.19X [6] - P/E ratios for various international ETFs include iShares MSCI Japan ETF (EWJ) at 16.40X, EEM at 15.85X, iShares China Large-Cap ETF (FXI) at 10.79X, iShares India 50 ETF (INDY) at 22.11X, and iShares MSCI Brazil ETF (EWZ) at 10.69X [7] Economic Stimulus and Policy Differences - The European Central Bank initiated rate cuts earlier in 2025 but halted further easing due to trade uncertainties, while India and China pursued policy stimuli [8] - The U.S. adopted a contrasting approach with budget cuts and reduced federal expenditures, with the Federal Reserve enacting three rate cuts since September [9] Top-Performing Country ETFs - iShares MSCI South Korea ETF (EWY) rose by 92.3% and Franklin FTSE South Korea ETF (FLKR) increased by 88.0%, driven by accommodative monetary policy and economic growth [12] - Global X MSCI Greece ETF (GREK) increased by 79.2%, supported by strong economic growth and an upgrade to developed market status [14] - iShares MSCI South Africa ETF (EZA) rose by 77.9%, with growth in the mining industry contributing to economic expansion [16] - iShares MSCI Spain ETF (EWP) increased by 77.5%, benefiting from a resilient labor market and gains in banks [17] - iShares MSCI Poland ETF (EPOL) rose by 76.7%, supported by protection from global trade tensions and fiscal stimulus from Germany [18]