Global Equities Set to Outperform US Stocks, Say Investors
According to the latest survey by a leading financial institution, international stocks are the favored investment for the coming five years. Investors overwhelmingly expect markets outside the United States to deliver stronger returns than their American counterparts.
The survey highlights a significant shift in sentiment, with fewer than one in four investors anticipating US assets to dominate performance rankings. Bonds, meanwhile, are expected by just 5% of respondents to be the best-performing asset class ahead.
International Markets Lead with Impressive Gains in 2025
Data reveals that the iShares MSCI All-Country World Index ex-US ETF (ACWX) has surged by 15% in 2025, starkly outperforming the S&P 500, which has seen only a 2.6% increase. This marks the largest margin of outperformance by ACWX compared to the S&P 500 since the ETF’s inception in 2008.
This robust showing coincides with a notable decline in US dollar positioning, reaching lows not witnessed in over two decades. The dollar's weakening has been influenced by geopolitical uncertainties and evolving trade policies, raising questions about its safe-haven status.
Impact of Trade Policies and Global Tensions
Recent US trade measures, including tariffs on imports introduced earlier in the year, coupled with ongoing negotiations with trade partners, have stirred market dynamics. Alongside escalating tensions in regions like the Middle East and Europe, these factors have propelled investors toward alternatives such as gold, which remains the most crowded trade for the third consecutive month, with 41% of investors holding long positions.
Investor Rotation Toward Emerging Markets and Europe
In June, there was a noticeable tilt among investors favoring the Eurozone, emerging markets, and banking sectors, while simultaneously reducing exposure to US stocks, the US dollar, and the energy sector.
One strategist pointed out, "Investors are most overweight Eurozone, emerging markets, and banks versus being underweight US stocks, the US dollar, and energy."
Wall Street Spotlight: Etsy's Encouraging Outlook
In related market news, a prominent financial firm raised its price target on Etsy shares by 9%, from $55 to $60, signaling an estimated 11% upside from recent closing prices. Analysts advised buying the dip, citing Etsy's relative resilience compared to competitors such as Temu and Shein, which face challenges from changing Chinese trade policies and rising tariffs.
Despite the elimination of the De Minimis exemption in China affecting some sellers, Etsy appears better insulated from cost pressures, making it a compelling pick amid the shifting trade landscape.
