3 Global ETFs Taking Off As US Economy Falters

In the face of growing macroeconomic uncertainties and new indications of economic slowdown, investors are increasingly directing their attention out of U.S. shores.

The first half of 2025 witnessed U.S. gross domestic product (GDP) contracted by 0.3%, a violent turnabout of the 2.4% expansion recorded for the last quarter of 2024. It is the initial economic downturn since 2022, and that bodes a possible turbulence for the future.

Adding to the decline are rising tariff tensions, which remain roiling market sentiment. Under such conditions, diversification on a global scale is no longer a nicety—it is becoming a requirement. Global ETFs are becoming increasingly attractive vehicles for investors who want to achieve growth and protection from home economic headwinds. Three of these ETFs are gaining increased attention below:

Avantis International Large Cap Value ETF (NYSE:AVIV)

• YTD performance: +12.4%
• The Avantis International Large Cap Value ETF has gained terrific momentum over the past few weeks. With more than $67 million in April alone (per FactSet data cited by VettaFi), AVIV’s draw is its value-oriented strategy towards non-U.S. large-cap stocks. The fund targets strong-fundamentally positioned names with long-term growth potential, thus offering a mix of defensive exposure and upside.
• AVIV’s value bias provides a timely benefit. When U.S. expansion weakens and valuation risks mount domestically, investors are seeking out more affordable equities outside the country. Not only does this strategy offer a plausible safe haven but also it fits with overarching themes of long-term capital appreciation.

Vanguard FTSE Emerging Markets ETF (NYSE:VWO)

• YTD performance: +3.2%
• For investors looking for targeted exposure to the world’s fastest-growing economies, the Vanguard FTSE Emerging Markets ETF is a compelling choice. VWO is concentrated in the stocks of countries such as China, India, Brazil, and Taiwan—markets typically underweight in more general international ETFs. Taiwan Semiconductor (NYSE:TSM), Tencent (OTCPK: TCEHY), Alibaba (NYSE:BABA) are among its largest holdings.
• With supply chains around the world reshaping themselves and growth potential shifting eastward, VWO leverages the long-term structural ascendancy of emerging markets.
• Even though the near-term volatility associated with these markets is a challenge, VWO provides diversification away from developed economies that are currently facing growth stagnation and policy uncertainty. It’s a compelling option for those willing to take a slightly higher risk and have a long time horizon.

Vanguard Total International Stock ETF (NASDAQ:VXUS)

• YTD performance: +8.6%
• The Vanguard Total International Stock ETF is another vehicle that has benefited from investors’ demand for international equity exposure. In contrast with its U.S.-oriented cousin, the Vanguard Total Stock Market ETF (NYSE:VTI), which declined more than 4% this year thus far, VXUS rose close to 9%, indicating rising confidence in overseas markets.
• VXUS offers exposure to thousands of stocks in non-U.S. developed and emerging markets. It’s a sound option for those seeking to diminish U.S.-specific risk without crossing into niche or high-fee territory. With economic expansion gaining momentum in a number of international economies, VXUS offers a simple, broad-market bet on global rebound.

What’s Next: With economic uncertainty fermenting and policy uncertainty hanging over the domestic horizon, the attraction of international ETFs will rise. Although no investment is risk-free, these funds do represent a level of diversification that can act as ballast in rough seas. Whether it’s valuation fear, macro headwinds, or plain old diversification strategy, the trend towards international exposure is less of a trend—and more of a necessary strategic realignment.

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