Why invest in international stocks when U.S. stocks have done so well?
The short answer
From 2010 through 2025, companies grew profits and reinvested nearly everywhere, and some of the fastest business growth happened outside the U.S. Emerging markets earnings grew 175% while U.S. earnings grew 192%, but U.S. market value grew 361%, much faster than the businesses underneath. Owning companies across regions means you don't need to predict which market will lead next.
How business growth compared by region from 2010 to 2025
U.S. stocks have dominated the headlines for fifteen years. Over that same stretch, companies grew profits and reinvested nearly everywhere in the world. Here's how three regions compared from December 31, 2010 to December 31, 2025:
- United States (Russell 3000): earnings up 192%, book equity up 110%, market value up 361%. Prices grew much faster than the businesses underneath them.
- International developed (MSCI World ex-USA IMI): earnings up 65%, book equity up 40%, market value up 86%. Growth was slower but steady in both prices and fundamentals.
- Emerging markets (MSCI Emerging Markets IMI): earnings up 175%, book equity up 242%, market value up 224%. The businesses grew as fast as their prices, or faster.
Earnings growth by country
The growth was widespread. Several of the countries with the fastest earnings growth from 2010 to 2025 rarely make U.S. headlines. These countries are shown only to illustrate historical growth in business fundamentals and aren't recommendations.
- China: up 766%
- India: up 295%
- Indonesia: up 207%
- Hungary: up 158%
- Philippines: up 153%
- Taiwan: up 143%
Why look at three measures instead of one
Earnings and book equity describe the business. Book equity is assets minus liabilities, which reflects what companies reinvested. Market value describes what investors paid for it.
Looking at all three shows whether prices moved with the underlying businesses. In the U.S., prices ran well ahead of earnings and book equity. In emerging markets, the businesses kept pace with their prices or outgrew them.
What this does and doesn't say
Nothing here predicts emerging markets will lead next. Owning them doesn't require knowing when they'll be rewarded.
Global diversification keeps you invested across regions, so no single market has to be the next winner. International and emerging-markets investing does carry special risks, including currency fluctuation and political instability, and diversification doesn't ensure a profit or protect against loss in a declining market.
Takeaway
From 2010 through 2025 business growth happened across many regions and countries, which is why we diversify globally instead of relying on one market.
Related questions
Did U.S. companies grow faster than international companies from 2010 to 2025?
U.S. earnings grew 192%, ahead of international developed markets at 65% and close to emerging markets at 175%. U.S. market value grew 361%, much faster than U.S. earnings or book equity.
Does this mean emerging markets will do better next?
No. Nothing here predicts emerging markets will lead next. Owning them doesn't require knowing when they'll be rewarded.
Sources
Sources: Avantis Investors Monthly ETF Field Guide (June 2026), pp. 3-9, using FactSet data from 12/31/2010-12/31/2025. U.S. represented by the Russell 3000 Index; non-U.S. developed by the MSCI World ex-USA IMI; emerging markets by the MSCI Emerging Markets IMI; countries by their respective MSCI IMI indexes. Figures are believed reliable but are not guaranteed.
Disclosures
This material is provided by Cornerstone Wealth Partners for educational and informational purposes only and does not constitute investment, legal, or tax advice, nor a recommendation to buy or sell any security. Regions and countries are referenced solely to illustrate historical growth in business fundamentals and are not recommendations. Past performance is not indicative of, or a guarantee of, future results. Growth figures reflect the change in aggregate market capitalization, book equity (assets minus liabilities), and earnings for companies within each region or country from 12/31/2010 to 12/31/2025. You cannot invest directly in an index. Diversification does not ensure a profit or protect against loss in a declining market. International and emerging-markets investing involves special risks, including currency fluctuation and political instability. Investing involves risk, including possible loss of principal. Cornerstone Wealth Partners is a registered investment adviser; registration does not imply any particular level of skill or training.
This article is for educational purposes only and is not personalized investment, tax, or legal advice. Talk with a qualified professional about your situation.