Core Insights - The strength of international equities ETFs is a significant market story for 2025, driven by investor interest in diversifying away from U.S. stocks and A.I.-driven concentration risks [1][2] - The performance of international equities ETFs in 2026 remains uncertain, but factors such as a weakening dollar and favorable foreign market conditions may support continued investor interest [3][4] Group 1: Market Dynamics - Investors are increasingly seeking foreign diversification to mitigate risks associated with the U.S. stock market, including a shifting yield curve and a declining dollar [2][3] - Many foreign markets have been more effective in managing inflation and are ahead of the U.S. in cutting cycles, making them attractive to U.S. investors [4] Group 2: Investment Strategies - The international equities space is diverse, with varying outcomes across different markets, suggesting that some markets may underperform while individual firms may thrive [5] - Active international equities ETFs, such as the T. Rowe Price International Equity ETF (TOUS), leverage fundamental research to identify investment opportunities, potentially outperforming passive ETFs in 2026 [6]