2025 Market Performance Analysis: Tech and Non-US Equities Lead Returns

This analysis is based on a Seeking Alpha article [5] published on December 15, 2025, which highlights strong 2025 returns for diversified investors focused on Tech and non-US equities. Empirical data [0] confirms the article’s claims: US large-cap Tech ETF QQQM returned 19.28% YTD 2025, outperforming broader US large-cap ETF VOO (+15.65%). Non-US equities delivered even stronger returns, with European ETF FEZ (Euro Stoxx 50) at +34.03%, UK ETF FLGB (FTSE 100) at +26.63%, and global ex-US ETF SCHF at +27.68% YTD [0]. External reports support these trends: Cambridge Associates [1] noted non-US equities outperformed US by ~11% in H1 2025, while Forbes [4] reported MSCI ACWI ex-US total return of 26.7% through Q3 2025 vs. S&P 500’s 14.8%. Drivers include non-US equities’ 14x forward earnings (35% discount to US [1]), better non-US growth prospects, and style rotation where Value outperformed Growth by 13% for EAFE markets [2].

1. Trend reversal
   : After a decade of US equity dominance [3], non-US equities and Value styles led 2025 returns, marking a potential shift in market dynamics.
2. Tech resilience
   : Despite broad style rotation, US large-cap Tech (QQQM) outperformed the broader S&P 500 [0], demonstrating sector resilience amid changing market conditions.
3. Strategic ETF alignment
   : The author’s chosen ETFs (VOO, QQQM, FEZ, FLGB, SCHF) exactly matched the year’s top-performing asset categories, reflecting successful diversification.
4. Valuation-driven outperformance
   : Non-US equities’ attractive valuations [1] were a key factor in their outperformance, as investors rotated from overvalued US peers.

• Risks
  : Valuation convergence risk (if US equities correct to align with non-US valuations), geopolitical and policy risks (tariffs, monetary policy changes [1]), and Tech sector volatility (regulatory changes, AI investment slowdown [1][4]).
• Opportunities
  : Sustained style rotation benefits (Value equities dominate non-US markets [2]), and non-US growth prospects from policy stimulus and ample capacity [1].

2025 delivered strong returns for diversified investors, with non-US equities (European and global ex-US) and US large-cap Tech leading. The outperformance was driven by valuation discounts, style rotation, and better non-US growth prospects. The author’s ETF selections aligned with top-performing asset classes, supporting their record year. Investors should monitor risks like valuation convergence and geopolitical factors while considering opportunities from continued style momentum.