For much of the past decade, international equities have lagged behind the S&P 500. U.S. large-cap growth names – particularly the “Magnificent Seven” – captured investor attention, while many investors overlooked global markets. But 2025 is shaping up differently.

According to Validea’s Country-Focused Model Portfolios, which apply the site’s consensus guru scoring system to top stocks across regions, international equities have not only caught up but in many cases surpassed U.S. benchmarks.

Global Outperformance in Numbers

Here’s how Validea’s international model portfolios stack up year-to-date:

• Asia Portfolio: +27.1% (vs. S&P 500 +10.0%, MSCI EAFE +23.3%)
• Europe Portfolio: +27.0%
• Canada Portfolio: +25.6%
• BRIC Portfolio: +18.3%
• Latin America Portfolio: +15.0%
• China Portfolio: +14.5%
• United States Portfolio: +15.0%

With Asia, Europe, and Canada all gaining more than 25% this year, the picture tells a clear story: many international stocks are having their day in the sun, at least so far this year.

What’s Driving the Surge?

1. Valuation Tailwinds – After years of trading at a discount to U.S. markets, international equities entered 2025 with far more attractive valuations. This created a margin of safety that set the stage for strong returns once sentiment improved.
   
2. Sector Leadership – Many non-U.S. markets are overweight financials, energy, and industrials compared to the tech-heavy U.S. benchmarks. The strength in global shipping, commodities, and financials has driven relative outperformance.
   
3. Diversification of Growth – Investors are increasingly realizing that innovation isn’t limited to Silicon Valley. Asia’s semiconductor leaders, Europe’s financials, and global energy firms have provided compelling opportunities.

Standout Performers

Asia Portfolio Leaders

• Futu Holdings (FUTU): +66.8% since added in June, a fintech powerhouse in China.
• Komatsu (KMTUY): +22.4%, benefiting from global infrastructure and mining demand.
• Nomura Holdings (NMR): +16.6%, reflecting strength in Japan’s financial sector.

Europe Portfolio Leaders

• NatWest Group (NWG): +113.3% since added, a remarkable rebound in UK banking.
• Global Ship Lease (GSL): +62.5%, highlighting the strength of global trade.
• HSBC Holdings (HSBC): +53.2%, showcasing Europe’s financial sector resurgence.

These gains illustrate how the consensus-driven quantitative framework can uncover opportunities beyond U.S. borders. The stocks held in these portfolios consistently score highly across many of Validea’s guru models – ranging from value and growth, to momentum, quality, and yield. By drawing on a diverse set of proven strategies, the approach identifies companies that demonstrate strong fundamentals and attractive characteristics from multiple perspectives. This cross-model validation not only reduces reliance on any single investing style, but also increases the likelihood of capturing durable opportunities across different market environments.

Take Futu Holdings (FUTU) as an example.

Added to the Asia portfolio in June, the stock has surged nearly 67%. What’s notable is that FUTU doesn’t just look good through one lens – it ranks at the top of multiple Validea models. It earns 100% scores under both the Momentum Investor and Twin Momentum Investor frameworks, signaling strong price and earnings momentum. It also scores well on Earnings Revisions (80%), reflecting positive analyst sentiment, and Growth Investing (77%), highlighting its accelerating earnings and sales growth.

This kind of broad-based strength across models shows why FUTU rose to the top of the consensus system: it isn’t just a momentum story or a growth story – it’s a company with multiple tailwinds validated by several proven strategies.

Why This Matters for Investors

The reversion of international stocks raises an important question for asset allocators: has the cycle turned? With Asia and Europe leading returns, global diversification is no longer a drag – it’s a driver.

Validea’s data suggests that investors who remained U.S.-centric may have missed a substantial part of 2025’s equity story. For those who believe in mean reversion and the long-term benefits of diversification, international exposure could continue to be a critical piece of portfolio construction.

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Further Research

• Validea Model Portfolios – Track performance of our guru-based and country-focused strategies.
• Guru Stock Screener – Find stocks scoring highly across Validea’s investing models.
• Consensus Picks – See stocks that rank well across multiple strategies.
• ETF Factor Report Tool – Analyze ETFs based on factors like value, growth, momentum, and quality.
• Country & Industry Model Portfolios – Top stocks across countries and sectors/industries.