Why IXUS Could Be Your Best Buy for 2026
💡 Key Takeaway
International stocks, led by the iShares Core MSCI Total International Stock ETF (IXUS), have outperformed the S&P 500 since 2025 and may continue to benefit from value rotation and weaker dollar.
International Stocks Surge Past U.S. Peers
Since the start of 2025, the iShares Core MSCI Total International Stock ETF (IXUS) has returned 50%, compared to a 27% gain for the Vanguard S&P 500 ETF (VOO). This marks a significant reversal from recent years when U.S. stocks dominated.
The outperformance began with a steep decline in the U.S. dollar, which boosted the value of foreign assets. The trend accelerated in early 2026 as investors rotated out of expensive tech stocks into cheaper, value-oriented international equities.
Meanwhile, megacap tech names like Microsoft, Nvidia, and Apple have traded well off their highs, reflecting growing concerns about AI overspending and potential interest rate hikes. This rotation has favored international stocks, which offer lower valuations and higher growth forecasts in many regions.
Why This Shift Matters for Investors
The recent outperformance of international stocks suggests a potential shift in market leadership after years of U.S. dominance. Historically, U.S. and international markets have traded leadership in multi-year cycles, and international stocks may be overdue for a sustained run.
Key drivers supporting this trend include lower valuations for international equities, stronger economic growth in certain regions, and ongoing geopolitical uncertainties that make U.S. assets less attractive. Additionally, the overhang of inflation and potential rate hikes keeps risk appetite subdued, benefiting value plays.
For investors, this means diversification into international stocks could reduce portfolio volatility while capturing upside. The iShares Core MSCI Total International Stock ETF (IXUS) offers broad exposure to this theme with low expenses.
Source: The Motley Fool
Analysis generated by Bobby AI quantitative model, reviewed and edited by our research team. This is not financial advice. Always do your own research before making investment decisions.
Bobby Insight
IXUS is a compelling buy for 2026 given its momentum, value, and diversification benefits.
International stocks have a strong tailwind from a weaker dollar and a rotation to value. With lower valuations and higher growth prospects, IXUS offers a smart alternative to overpriced U.S. tech stocks.
What This Means for Me
