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Last August, we published a blog highlighting the impressive H1 2025 performance of the S&P World Ex-U.S. Momentum Index compared to both its benchmark universe and the S&P 500^®. This strong momentum persisted through the remainder of 2025, with the S&P World Ex-U.S. Momentum Index closing the year with an impressive 43.22% gain (see Exhibit 1).

For international market participants, this development may seem long awaited, as the S&P World Ex-U.S. Index outperformed The 500^® by 14.68%—its largest margin in more than 30 years, surpassing every other year since 1993’s 20.51% outperformance. Furthermore, the S&P World Ex-U.S. Momentum Index delivered a 25.44% outperformance over The 500, marking its strongest result since 1998, when it achieved an outperformance of 27.66%.

In addition to updated performance figures, this blog will present sector and geographic weights as of Dec. 31, 2025, along with a brief overview of the index methodology.

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Index Methodology

Exhibit 2 provides a refresher on the index methodology. In short, the index selects constituents from developed markets (excluding the U.S. and South Korea) based on 12-month risk-adjusted price momentum, omitting the most recent period to reduce short-term reversal effects.

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Performance Comparison

The S&P World Ex-U.S. Momentum Index consistently outperformed its benchmark across every back-tested period since Dec. 31, 1994, while also showing higher risk-adjusted returns and downside capture relative to the S&P World Ex-U.S. Index (see Exhibit 3).

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Exhibit 4 highlights the S&P World Ex-U.S. Momentum Index’s strong and consistent outperformance, surpassing its benchmark universe in over 62% of rolling three-year periods, with a maximum outperformance of 110% and a minimum underperformance of just 17%.

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Sector Weight Analysis

As of Dec. 31, 2025, the S&P World Ex-U.S. Momentum Index continued to show a significant overweight in the Financials sector, resulting in slight underweights across most other sectors (see Exhibit 5). As illustrated in Exhibit 6, the sector weights are highly dynamic and tend to shift rapidly in response to changes in the momentum signal, rather than exhibiting a consistent bias toward specific sectors.

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Region Weight Analysis

As of Dec. 31, 2025, the S&P World Ex-U.S. Momentum Index maintained a significant underweight position in Japan. The Canadian market currently holds both the largest overweight at 7.2% and the highest absolute weight at 18.9% within the S&P World Ex-U.S. Momentum Index. Much like the full-period sector comparison, the index generally does not display consistent biases toward specific countries over the long term.

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Conclusion

The S&P World Ex-U.S. Index’s strongest outperformance versus the S&P 500 in over three decades was likely welcome news for international market participants. Against this backdrop, the S&P World Ex-U.S. Momentum Index delivered a remarkable performance of 43.32% 2025—its strongest calendar year performance since 1999. The S&P World Ex-U.S. Momentum Index’s 2025 results highlight the recent strength of the momentum factor across developed markets internationally.

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