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In a striking reversal of fortunes, equities in developed markets ex-US are now leading the major asset classes in 2025 while US shares are posting a modest loss year to date, based on a set of ETFs through Wednesday’s close (Mar. 5).

The Vanguard FTSE Developed Markets ETF (VEA) is up 9.8% so far this year, in stark contrast with a 0.9% decline for its American counterpart, Vanguard Total US Stock Market Index Fund ETF (VTI).

The developed-markets ex-US fund (VEA) is also leading the rest of the field by a wide margin. The second-best performer for the major asset classes this year: US real estate investment trusts (VNQ) with a solid 5.9% advance.
For context, note that the Global Market Index (GMI) is ahead by a modest 1.8% so far in 2025. GMI is an unmanaged benchmark (maintained by CapitalSpectator.com) that holds all the major asset classes (except cash) in market-value weights via ETFs and represents a competitive benchmark for multi-asset-class portfolios.

The sight of US stocks falling to the back of the line and posting the only loss year to date among global markets highlights a dramatic shift in leadership, but the catalyst is no mystery. President Trump’s trade war has roiled markets, unleashing a surge of uncertainty about the macro implications. The US economy isn’t likely to be immune. As noted yesterday on CapitalSpectator.com, first-quarter growth nowcasts for US GDP have fallen sharply lately.

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