Further confirming that more investors are seeking opportunities outside of U.S. borders, Morningstar data showed that international equity ETFs saw $22 billion in net flows during the month of October.
As of October 31, international equity ETFs now comprise 14% of the total ETF marketplace. The record October brought the full 2025 inflows to over $150 billion and net assets of $2,014 billion.
The attraction of new capital to international equity ETFs came despite ongoing market uncertainties. Tariffs, geopolitical tensions, and changing interest rate policy decisions in the United States might deter investors from venturing outside of domestic equities, but that hasn’t been the case this year.
Speaking of changing interest rate policy, the rate-cutting cycle in the U.S. is helping the flight to international equities. Further rate cuts by the U.S. Federal Reserve could sustain a move towards international equities as the dollar continues to slide.
The MSCI ACWI Ex USA index that measures the performance of stocks in the major developed and emerging market countries (sans the U.S.) is also gaining while the ICE U.S. Dollar Index heads in the other direction. The MSCI index has been outpacing the performance of the S&P 500 for most of the year.
^MSACXUSTR data by YCharts
Given the rising demand in international equities, prospective investors looking to gain exposure should consider active strategies via cost-effective, transparent, tax-efficient investment vehicles: ETFs. Thornburg has a pair of funds that offer just that: the Thornburg International Equity ETF (TXUE) as well as the Thornburg International Growth Fund ETF (TXUG).
TXUE gives investors broad international equities exposure while TXUG tilts towards the growth factor. TXUG is ideal alternative for investors looking to diversify outside of large cap U.S. growth stocks that may appear overvalued relative to their underlying fundamentals.
Furthermore, the actively managed TXUE and TXUG leverage the expertise and experience of the Thornburg investment management team. They can deftly navigate international markets that carry their own unique idiosyncrasies and risks that vary from country to country.
For a deeper dive on how active investing can help with international equities exposure, watch a recent webinar with Thornburg Investment Management: Going Global: An Advisor’s Guide To Looking Beyond the US. In addition, click here to learn more about TXUE and TXUG as well as Thornburg’s full suite of ETFs that could be ideal for an investor’s portfolio.
For more news, information, and strategy, visit the Portfolio Strategies Content Hub.
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