In 2025, international stocks outperformed domestic ones for the first time in years, with many ex-U.S. ETFs significantly surpassing the S&P 500. This trend continues into 2026, as the iShares Core MSCI Total International Stock ETF (NASDAQ: IXUS) has risen 7.5% year-to-date, compared to a 1.9% gain for the S&P 500. Smaller international stocks are also contributing to this resurgence, prompting a recommendation for the Avantis International Small Cap Value ETF (NYSEMKT: AVDV) as a top choice for the year. Winning small caps are predominantly found outside the U.S., highlighting their potential for growth.
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