What Is One of the Best ETFs to Own for the Next 10 Years?

International developed markets and emerging markets have outperformed U.S. stocks in 2025, and the article argues the trend could extend for several years. The case rests on more attractive valuations, with the Vanguard FTSE Developed Markets ETF at a 17x P/E versus 26x for the Vanguard S&P 500 ETF, plus a weaker-dollar thesis tied to rising U.S. debt and deficits. The piece is broadly constructive on foreign equities, but it is mainly opinionated portfolio commentary rather than a market-moving catalyst.

Analysis

The setup is less about a clean “buy Europe” call and more about a regime change in factor leadership. If the dollar is entering a multi-year downtrend, the first beneficiaries are not just foreign equity indices but U.S.-listed multinationals with non-U.S. revenue exposure and local-currency cost bases; that means the relative winner may be quality exporters, not a broad passive developed-markets basket alone. The valuation gap is real, but the larger second-order effect is that capital allocation and buyback capacity increasingly migrate to jurisdictions that can finance growth without U.S.-style fiscal crowding-out.

The clearest loser is the long-duration U.S. exceptionalism trade: expensive U.S. growth gets hit twice by multiple compression and FX translation, while foreign cyclicals gain both from re-rating and a weaker dollar tailwind. That said, the move is likely to be uneven by region and sector; countries with credible fiscal anchors and current-account strength should outperform commodity-dependent markets if global growth slows, while banks and industrials should benefit earlier than defensives. The market is likely underestimating how much of the international outperformance can come from earnings revisions rather than just multiple expansion.

The main risk is that this is a crowded narrative before it becomes a crowded trade in price action. A sharp USD rally on Fed hawkishness or U.S. growth re-acceleration would punish the de-dollarization thesis quickly, and a global risk-off shock would favor USD liquidity over foreign beta for weeks to months. The contrarian view is that “cheap” international stocks may stay cheap if local growth underwhelms; the better expression is to own balance-sheet strength and FX beneficiaries, not simply broad ex-U.S. exposure.

Key Decisions for Investors

• Add a tactical long VEA / short VOO pair for a 3-6 month window; target 8-12% relative outperformance if the dollar resumes drift lower, but cut if DXY breaks materially higher on growth divergence.
• Prefer high-quality international exporters and semi-cap names over broad index exposure; use a basket hedge against local macro risk rather than owning the whole developed ex-U.S. complex indiscriminately.
• In U.S. equities, rotate toward multinational revenue earners with large non-U.S. sales exposure and lower valuation multiples versus mega-cap U.S. growth; this is the cleaner FX beneficiary if the dollar weakens over 6-18 months.
• Avoid chasing the trade after a single USD down-leg; wait for a dollar rally to fade into resistance before adding foreign equity beta, because the risk/reward is materially worse if the move becomes consensus fast.