In 2025, while the S&P 500 plods along with a meager 2% increase, international stocks are enjoying a remarkable resurgence, making them a more attractive prospect for investors seeking higher returns. The volatility of U.S. markets, underscored by uncertainty regarding interest rate policies and geopolitical tensions, is causing many to reassess their investment strategies. The timing couldn’t be more opportune for those seeking to diversify their portfolios beyond the U.S., predominantly capable of absorbing the faltering energies of the tech giants that once dominated the scene.
It’s time to acknowledge that saturated positions in American firms, particularly in Big Tech, may now pose more risk than reward. The volatility stemming from significant global events has given rise to international equities positioned for success, especially those offering dividends. Marguerita Cheng, CEO of Blue Ocean Global Wealth, highlights that while these international stocks may have lagged previously, they are not only catching up, but are outperforming their U.S. counterparts this year.
Vanguard’s International Edge: A Case Study
The Vanguard FTSE All-World ex-US ETF (VEU) serves as an exemplary model of this trend, boasting a robust 14% uptick in 2025 on the heels of a 5.5% return in the prior year. For dividend-seeking investors, the ETF enables access to international equities that promise not just growth, but income as well. This duality – a blend of capital appreciation and dividend returns – is appealing in today’s uncertain economic climate, making a strong case for higher allocation to international markets.
Investors looking to mix domestic and international equities should consider the First Trust Target Global Dividend Leaders Portfolio. It provides a strategic combination designed to capture diverse global opportunities. This investment blend shines a light on international companies ready to reward shareholders, especially amidst the turbulence seen in the current market landscape.
Noteworthy Contenders: Airlines and Mining Giants
Among the exciting prospects floating in the international market, Copa Holdings and Vale stand out for their impressive stock performance and attractive dividends. Copa Holdings, a Panamanian airline, boasts a staggering 16% increase in shares for 2025 and a remarkable 6.3% dividend yield. Analysts have shown overwhelming confidence, with over 90% rating it a buy or overweight. Recent reports reveal that Copa has reported record earnings, masking the choppy waters that generally buffet the airline industry. This strong performance, alongside sustained demand in North America and the Caribbean, enforces the belief that Copa is on a trajectory for growth.
Vale, the Brazilian mining powerhouse, is another name that holds immense promise. Rated positively by nearly 60% of analysts, it has marked a 3% increase in 2025 alongside a whopping 9.1% dividend yield. Analysts highlight a significant turnaround in the company’s fortunes due to better management and resolution of past operational issues. The improved bottom line has analysts rallying behind the stock, with price targets pointing towards substantial gains, indicating a solid margin of safety contrary to the lackluster forecast for iron ore.
The Aviation Sector: Latam Airlines on the Rise
Latam Airlines Group presents another compelling international investment opportunity, particularly for those interested in the aviation sector. The share price for this Chilean airline has soared 37% in 2025, coupled with a healthy dividend yield of 2.7%. Increased passenger traffic, outpacing projections with a notable 9.8% increase, further solidifies Latam’s progress. With analysts from Morgan Stanley leaning heavily towards an overweight position, the company appears poised for continued growth through the dynamic landscape of Latin America’s recovery from pandemic setbacks.
A New Frontier for Liberal Investors
As U.S. markets face increasing pressures from myriad economic uncertainties, a growing contingency of center-right investors is reconsidering their strategies. The desire for stability combined with yield is prompting a shift towards international equities. While the latter’s historical performance may have had its lows, current momentum indicates that now is not the time to be complacent. Advocacy for diversification and a reevaluation of global market potential will likely prove dividends—both literal and metaphorical—in the long haul.
In today’s world, where the dynamics of global markets are shifting rapidly, capitalizing on the potential of international stocks could be a game-changer for investors willing to break away from the traditional mold. Whether driven by dividends or growth prospects, the best opportunities may lie beyond American shores. As we navigate these turbulent waters, the wisdom of looking outward and considering global economic indicators may just illuminate a path toward a more robust and resilient investment strategy.