International ETFs are staging a comeback this year after years of U.S. market dominance fueled by Big Tech and the Magnificent Seven.
Global ETF assets under management touched a record $21.91 trillion at the end of April, data from ETFGI shows. That exceeds the previous high of $21.24 trillion achieved in February.
Developed markets outside the U.S. gained 9.44% in April and are up 9.63% year-to-date in 2026, roughly matching, and in some cases outperforming, the S&P 500’s near-9% gain this year. Emerging markets also climbed 10.53% in April and are up 7.39% so far this year.
The steady performance is reigniting interest in international and emerging-market ETFs after a decade in which U.S.-focused stocks and funds dominated investor flows.
Korea And Taiwan ETFs Lead The Rally
Among developed markets, South Korea posted one of the strongest gains globally in April, with YTD gains of more than 38%, while Taiwan continued to benefit from semiconductor- and AI-related momentum. Taiwan stocks gained more than 26% YTD.
That has boosted emerging-market (EM) ETFs with heavy exposure to Asian technology and chip manufacturing, including Ishares Msci South Korea ETF (NYSE:EWY), which has returned more than 79% so far this year, Ishares Msci Taiwan ETF (NYSE:EWT), which has gained around 45% YTD, iShares Semiconductor ETF (NASDAQ:SOXX) with more than 65% YTD returns, and VanEck Semiconductor ETF (NASDAQ:SMH) with nearly 55% YTD gains.
Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) remains a dominant holding across several global semiconductor ETFs, while Korean equities have benefited from renewed foreign inflows into memory-chip and AI infrastructure plays.
Investors are also rotating toward broader international equity funds such as Vanguard Tax Managed Fund FTSE Developed Markets ETF (NYSE:VEA), which gained almost $8 billion in inflows this year, per ETFDb. The iShares Core MSCI EAFE ETF (BATS:IEFA), the Vanguard Total International Stock Index Fund ETF (NASDAQ:VXUS) have also enjoyed strong interest this year, with YTD inflows of over $7 billion and $14 billion, respectively.
Valuation Gap Is Driving Diversification
One major catalyst behind the renewed interest in international ETFs is valuation.
After years of U.S. outperformance, many international markets still trade at substantial discounts to American equities, particularly compared with high-priced AI and mega-cap technology stocks.
That valuation gap is becoming increasingly attractive as investors search for diversification beyond the concentrated U.S. tech trade.
The rotation also comes as:
- The dollar has softened from recent highs,
- global central banks begin diverging from the Federal Reserve,
- International markets benefit from improving industrial and manufacturing activity.
General emerging-market ETFs are also seeing renewed interest, particularly in Asia-focused funds such as Vanguard Emerging Markets Stock Index Fund ETF (NYSE:VWO) with more than $4 billion in inflows this year and iShares MSCI Emerging Markets ETF (NYSE:EEM) with more than $3 billion in inflows this year.
America-Only Trades Start To Fade
For much of the past decade, investors had little incentive to look outside U.S. equities as the S&P 500 consistently outperformed global peers.
But 2026’s market dynamics are beginning to shift that narrative.
U.S. AI leaders continue driving gains, but investors increasingly appear willing to complement domestic exposure with international ETFs tied to semiconductors, industrial recovery and cheaper valuations abroad.
The trend could become even more pronounced if Treasury yields remain elevated, the dollar weakens further, or global growth broadens beyond the U.S. technology sector.
Photo: Shutterstock
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