Foreign Stocks Lead 2025 Bull Market: International Equity Outperformance Analysis

This analysis is based on the Seeking Alpha report [1] published on November 10, 2025, which highlights that foreign stocks are leading market performance in 2025, with risk appetite favoring portfolio strategies showing widespread gains across global markets.

The Seeking Alpha analysis [1] is strongly supported by market data confirming international equity outperformance:

• VEA (Developed Markets ex-US) delivered +2.38% over 30 days, outperforming US total market (VTI) by 0.63 percentage points [0]
• Trading range of +4.88% ($59.18-$62.07) with robust daily volume of 11.14M shares indicates strong investor interest [0]

• VWO showed +0.57% over 30 days with higher volatility (1.10% daily standard deviation) [0]
• YTD performance reaches 33.55%, substantially ahead of S&P 500’s 17.50% [2]

• Dow Jones led US indices with +4.17%, while Russell 2000 lagged at +0.83% [0]
• Technology sector underperformed with -0.87%, while Healthcare led at +1.12% [0]

The international outperformance occurred despite challenging currency conditions:

• US dollar strengthened by 2% in October, typically a headwind for international returns [3]
• Emerging markets still surged 7.98% in October while developed markets added 1.35% [3]
• International bonds also participated, with EM local currency bonds up 16% YTD [4]

The “genius-is-a-bull-market trade” referenced in the original article [1] appears to be strategic overweight positioning in international equities. This strategy has proven successful across multiple timeframes and asset classes, suggesting a broader market rotation away from US-centric allocations.

The data indicates this is not a short-term phenomenon but a sustained market rotation:

• International developed markets up 27.42% YTD, nearly double S&P 500 returns [2]
• Performance consistency across both developed and emerging markets suggests fundamental drivers beyond mere currency effects [0][2][3]

Despite higher volatility in emerging markets (1.10% daily standard deviation) [0], the superior returns may justify the risk for many investors. The question raised in the original article about whether to “cash in one’s chips” [1] becomes increasingly relevant as the year progresses.

The widespread gains across asset classes indicate healthy market conditions:

• All major asset classes posting gains in 2025 [1]
• Strong performance across both equity and fixed income international assets [4]
• This breadth suggests the rally has solid foundations rather than being concentrated in narrow sectors.

1. Currency Reversal Risk
   : The current outperformance occurred despite dollar strength [3]; a continued dollar rally could pressure international returns

2. Mean Reversion Potential
   : After such strong outperformance, international markets may be vulnerable to profit-taking and rotation back to US assets

3. Concentration Exposure
   : Emerging markets carry higher political and regulatory risks [4], with significant exposure to China, Brazil, and Taiwan

4. Valuation Concerns
   : Extended outperformance may have reduced valuation advantages that initially attracted investors

1. Continued Outperformance
   : Economic fundamentals and policy divergence could sustain international leadership

2. Diversification Benefits
   : International exposure provides portfolio diversification away from US-centric risks

3. Sector Opportunities
   : Specific international sectors may offer additional alpha potential beyond broad market exposure

4. Fixed Income Synergy
   : Strong international bond performance [4] suggests comprehensive international allocation strategies

International equities have established clear leadership in 2025, with emerging markets delivering 33.55% YTD returns and developed markets ex-US adding 27.42%, both substantially outperforming US benchmarks [2]. This outperformance has persisted despite currency headwinds [3] and shows strong market breadth across asset classes [1][4]. The data validates the “genius trade” thesis of overweight international exposure, though the strong performance raises legitimate questions about profit-taking timing [1]. Current market conditions show developed markets (VEA) maintaining momentum with +2.38% 30-day returns [0], while the broader market rotation appears supported by fundamental economic factors rather than speculative positioning.