Markets are shifting quickly, and investors are rethinking how to diversify their portfolios. Inflation remains stubborn, while international stocks keep trading at deep discounts. Small caps may finally be entering an earnings rebound. In this environment, some of the best ETFs may come from areas that investors have overlooked for years. Philip Blancato, president and CEO of Ladenburg Thalmann Asset… ...

RT Custom Content from WSJ (@WSJCustom)Paid Program with @Vanguard_Group: International stocks are back on top after a decade lagging behind U.S. equities. Vanguard experts weigh in on whether that trend is likely to continue.https://t.co/DyYymT7XQw https://t.co/SWC7zA8RdC ...

Market Trends & Performance - International stocks and ETFs are outperforming the US stock market [1][2] - The MSCI All Country World ex USA Index is up approximately 30% year-to-date, marking its widest outperformance against broad US indexes in 16 years [3] - US dollar weakness, declining about 9% this year, boosts returns of foreign indexes in dollar terms [3] - International stocks are attractively valued after 10-15 years of underperformance versus US stocks [3] ETF Analysis & Diversification - Diversification and better valuation are reasons to consider international stock ETFs [5] - VXUS, a Vanguard ETF, holds 8,700 developed and emerging market stocks excluding the US, with a 005% expense ratio and $111 billion in assets [6] - IVLU, an iShares ETF, focuses on value characteristics, holding 343 large and mid-cap developed excluding US stocks, with a 030% expense ratio and $8 billion in assets [9] - Gwell, a Cambria ETF, is actively managed, focusing on the cheapest countries in the world with a concentrated portfolio of 113 stocks, a 066% expense ratio and $353 million in assets [10][11] Sector & Country Allocation - International stock ETFs offer more diversification to sectors beyond technology, such as financials and industrials [8] - Top countries in VXUS include Japan, China, UK, Canada, and Taiwan [9] - Japan receives approximately 30% weight in IVLU [9] Comparative Performance - Gwell is up about 47% year-to-date, IVLU is up about 37%, and VXUS is up about 30%, compared to the S&P 500 index which is up about 17% year-to-date [13]

Core Insights - The period from 2015 to 2024 was challenging for international stocks, with the MSCI EAFE Index returning 66.9%, significantly lower than the S&P 500's 239.9% gain [1] Group 1: Current Performance - The iShares Core MSCI EAFE ETF (IEFA) has shown strong performance in 2025, returning 27.6% as of October 17, outperforming the S&P 500's 14.4% gain [2] Group 2: Investor Behavior - Many U.S. investors are underallocated to international stocks, with an average weight of only 25% in their equity portfolios compared to domestic equities [4][5] - This underallocation presents an opportunity for IEFA to rally further if U.S. investors adjust their perspectives on international equities [5] Group 3: Market Opportunities - Japan is highlighted as an underowned market, with inexpensive stocks and ongoing corporate governance changes that encourage buybacks and dividends [6] - The IEFA fund allocates 24% of its investments to Japanese stocks, suggesting potential benefits if global asset allocators recognize the value in Japan [6]

Core Insights - International equities, particularly dividend payers, are outperforming U.S. stocks, with the ALPS International Sector Dividend Dogs ETF (IDOG) achieving a year-to-date gain of nearly 26% and reaching a 52-week high [1][2]. Performance Metrics - IDOG has outperformed the S&P 500 by nearly 2-to-1 since the beginning of the year, with only 10.57% of its allocation in technology stocks [2]. - French and Japanese stocks account for over 31% of IDOG's geographic exposure, contributing to its strong performance [3]. Market Dynamics - Many U.S. investors are under-allocated to international stocks, with only about 25% of their stock portfolios in this category, despite international stocks representing nearly 40% of global equity market capitalization [4][5]. - The declining U.S. dollar has positively impacted international stocks, enhancing returns for U.S. investors by increasing the value of foreign earnings when converted back to U.S. dollars [5][6]. Future Outlook - Experts suggest that international equities may have further upside potential, especially as U.S. investors may need to reassess their allocations towards international stocks [4][5]. - The current trend of U.S. dollar weakness is expected to continue, which could further benefit international equities [6].

Group 1 - The individual began investing in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - Recently, the investment strategy has evolved to combine long stock positions with covered calls and cash secured puts, reflecting a more sophisticated approach to investing [1] - The investment philosophy is fundamentally long-term, with a primary focus on REITs and financials, while occasionally exploring ETFs and other stocks based on macro trade ideas [1]

Group 1 - International stocks are outperforming domestic equities in 2025, with both ex-US developed markets and emerging markets leading the S&P 500 this year [1] - The performance of international stocks is supported by a 10% year-to-date decline in the value of the US dollar [1]

Market Overview - The equity market has experienced a significant recovery since Liberation Day, with low stocks increasing by 38% [1] - The current period, historically challenging, includes August, September, and October, suggesting a potential for a 5-10% correction due to high forward multiples for the S&P at approximately 22 times earnings [2] Earnings Performance - Second quarter revenues rose by 6% year-over-year, while earnings increased by 12% year-over-year, both exceeding expectations [4] - Earnings estimates for the remainder of the year are being reevaluated upwards, indicating solid double-digit growth [5] Economic Indicators - The GDP estimate for the U.S. next year is projected at 2.8%, significantly higher than the blue chip consensus of 1.5% [6] - International stocks are currently valued about 40% cheaper than domestic stocks, with a typical discount of around 20% [8] Investment Strategy - There is a belief in a rolling rotation within the market, with potential profit-taking from high-performing stocks benefiting small-cap, value, and international names that have lagged [3] - The international asset class is favored, supported by a weak dollar and more accommodative foreign central banks, which are expected to facilitate stronger economic and earnings growth [9][10]

Market Overview & Outlook - Equity market experienced a phenomenal recovery, with low stocks up 38% since Liberation Day [1] - A potential 5-10% correction is possible, considering the S&P's forward multiples at approximately 22 times earnings and the 10-year Treasury yields slightly above 4% [2] - The market is expected to see a rolling rotation, with profit-taking from the "Magnificent Seven" benefiting small-cap, value, and international stocks [3] Earnings & Revenue Performance - Second-quarter revenues increased by 6% year-over-year, and earnings increased by 12% year-over-year, both exceeding expectations [4] - Third-quarter revenues are projected to increase by approximately 6-7%, with earnings expected to show solid double-digit growth [4] - Federated Hermes is reevaluating and increasing its earnings estimates for the remainder of the current year and the following year [5] Economic Indicators & GDP - The U S GDP estimate for the next year is 28%, while the blue-chip consensus is 15% [6] International Markets - International stocks are considered attractive due to valuations being 40% cheaper than domestic stocks, compared to a typical discount of 20% [8] - The dividend yield on international stocks is approximately 29%, significantly higher than the S&P's 12% [8] - A weak dollar and accommodative foreign central banks are expected to facilitate stronger economic and earnings growth in international markets [9] - The company maintains an overweight position in international assets, viewing them as a favorable subcategory [10]

Core Insights - International stocks are significantly outperforming U.S. stocks in 2025, indicating a shift in investment trends and potential opportunities in global markets [1] Group 1 - The performance of international stocks has shown a marked improvement, with returns exceeding those of U.S. stocks by a considerable margin [1] - Investors are increasingly looking towards international markets as a viable alternative to U.S. equities, driven by various economic factors [1] - The trend suggests a growing confidence in global economic recovery and diversification strategies among investors [1]