{"id":18816,"date":"2025-10-16T17:13:03","date_gmt":"2025-10-16T23:13:03","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=18816"},"modified":"2025-10-16T17:13:03","modified_gmt":"2025-10-16T23:13:03","slug":"international-annual-returns-breakout-in-emxc","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=18816","title":{"rendered":"International Annual Returns \/ Breakout in EMXC"},"content":{"rendered":"

International funds and ETF’s have outperformed the SP 500 this year, primarily due to the weaker dollar.<\/p>\n

This was the first year in a LONG time international has done this well, versus the SP 500.<\/p>\n

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(Click on the above spreadsheet to expand it for easier reading.)<\/p>\n

Is there more “alpha” left in non-US asset classes ?<\/p>\n

The 5-year annual returns have now moved into the low-double-digits, but note how the 10-year returns are all mostly single digit annual returns. The 10-year and 15-year returns are still quite paltry relative to the SP 500’s annual returns, from which we could reasonably expect more upside from the asset class.<\/p>\n

This blog bought more of the EMXC ETF today, as the iShares MSCI Emerging Markets Ex-China ETF (EMXC) has now moved nicely ahead of it’s late 2021 highs in the low to mid $60’s and today broke above $70 per share for the first time. Emerging markets in general have had a decent year in 2025, but they have lagged international for a while and likely also have more upside on a relative basis to the US and international.<\/p>\n

Not being a fan of China in any way, I’d much prefer to have no China exposure of any kind in client accounts, and the EMXC is one way to accomplish that.<\/p>\n

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This Y-charts graph shows the annual return on the SP 500 (total return) versus the EMXC since the EMXC started trading in September ’17.<\/p>\n

The EMXC gave up almost 900 basis points in annual return versus the SP 500 in the last 8 years.<\/p>\n

Time to play reversion-to-the-mean.<\/p>\n

Summary \/ conclusion: <\/strong><\/em>Japan is another country that has broken out of it’s 34 – 35 year consolidation in the last 18 months. After peaking at roughly 38,000 in late December, 1989, the Nikkei has finally moved above that level. I can’t tell you how many times I’ve heard a brokerage firm “bull” Japan and the Nikkei in the last 30 years only to be sorely disappointed after the major Japanese benchmark went nowhere.<\/p>\n

Now, you rarely hear a sell-side firm pushing Japan, and we have a breakout. Warren Buffett shocked a few people a few years ago buying shares of various Japanese financials, and I’m guessing it shocked a few people. The election of the new Japanese prime minister should be a plus since she is pro-growth and not a big fan of China (as I understand it).<\/p>\n

International and now emerging markets are continue to look good, and should show decent “relative” performance as the US secular bull market enters its 15th – 16th year.<\/p>\n

International investing is not without risk, so do your homework and try and look at established ETF’s and funds with a longer track record.<\/p>\n

None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results.<\/p>\n

Thanks for reading.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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