International And Emerging Markets Starting To Percolate: 10- And 15-Year Annual Returns Still Modest

International equities and bonds have performed strongly in 2025, with Emerging Markets ex-China notably retesting its June 2021 peak, as the iShares Emerging Market ex-China ETF (EMXC) closed at $63.70 on July 18th, 2025, near its $63.74 high. This recent progress follows a 15-year period post-2008 where non-US asset classes delivered largely average, single-digit returns, indicating potential for these historically underinvested markets.

Analysis

Emerging Markets ex-China are demonstrating signs of a potential trend reversal in 2025 after a protracted period of underperformance since the 2008 financial crisis. The primary catalyst for this view is the price action of the iShares Emerging Market ex-China ETF (EMXC), which closed at $63.70 on July 18, 2025, directly retesting its June 2021 peak of $63.74. This technical development is significant, especially when contrasted with the modest single-digit annualized returns that have characterized most non-US asset classes over the last 5, 10, and 15-year periods. The strong positive sentiment score of 0.7 for EMXC underscores the market's focus on this specific breakout potential, even as broader sentiment on the asset class remains mixed. This price action supports the thesis that international and EM equities may be underinvested and poised for a potential rotation of capital should this technical resistance level be decisively breached.

Key Decisions for Investors

• Investors should closely monitor the iShares Emerging Market ex-China ETF (EMXC) for a sustained close above the $63.74 resistance level, as a convincing breakout could signal the start of a new long-term uptrend.
• Given the asset class has been underinvested for over a decade, those with underweight allocations to international equities may consider initiating or increasing exposure to Emerging Markets ex-China to capture potential catch-up growth.
• Despite the positive momentum, it is important to recognize the long history of underperformance; therefore, consider this a tactical opportunity and await further confirmation of fundamental strength before making a large strategic allocation.