Jul 31, 2025 Global
iSHARES CORE MSCI TOTAL INTERNATIONAL STOCK ETF
Broad, low-cost exposure to over 4,000 international stocks across developed and emerging markets.
iSHARES CORE MSCI INTERNATIONAL DEVELOPED MARKETS ETF
Low-cost, diversified exposure to over 20 developed markets outside the U.S., across all market caps.
iSHARES MSCI INTL QUALITY FACTOR ETF
Targeted exposure to developed international stocks with strong fundamentals and stable earnings.
International stocks trounced U.S. equity markets in the first half of 2025, in one of the largest performance gaps in decades (Figure 1). While we still believe many U.S. companies are exceptional, and we continue to believe in the growth potential of the artificial intelligence (AI) theme, we see three reasons for U.S. investors to consider increased exposures to international stocks, as detailed below: the dollar’s downturn, concentration risk in U.S. large-cap indexes like the S&P 500, and the value tilt of international equities.
Source: Bloomberg, as of June 23, 2025. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
Chart description: Line chart looking at the S&P 500 Index, MSCI EAFE Index, and Emerging Markets (EM) Index from 2024 to 2025.
The dollar is down nearly 10% year to date.1 Still, we believe it has farther to fall. The dollar has long benefited from a cycle of robust U.S. growth and investment, attracting foreign capital which in turn strengthened the dollar, creating a virtuous cycle. However, we think the dollar’s structural bull market that has persisted since 2014 may be coming to an end as American exceptionalism is challenged. Unpredictable trade policy, a reorientation of global growth, or demand for alternative reserve currencies could all weaken foreign demand for U.S. assets, putting further downward pressure on the dollar.
Over the last decade, a strong dollar has dampened international returns for a U.S.-based investor. Consider Figure 2, where unhedged international developed market returns (MSCI EAFE Index) benefited from currency impacts in just two of the preceding 10 years. Should our expectations for further dollar weakness be realized, U.S. investors could face a sea change in their experience of international investing, where currency becomes a tailwind to bolster returns rather than a headwind to diminish them.
Source: Bloomberg, BlackRock. Total returns are represented by MSCI EAFE index calculated in USD, while local equity returns refer to MSCI indexes calculated in local currency (MSCI EAFE Local Index). Currency impact is calculated by taking the MSCI EAFE Index return minus the MSCI EAFE Local Index return. Currency impact as represented by the difference in returns in USD – Local. 2025 as represented by YTD returns (1/1/2025 – 6/10/2025). Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
Chart description: Bar graph looking at unhedged international returns from 2015 to 2025.
The so-called Magnificent Seven stocks have delivered remarkable returns over the past three years, fueled by the promise of AI and the unrivaled ability of U.S. corporations to generate outsized profits.2 Strong performance from the top has also improved the quality attributes of broad indexes, reducing average leverage and increasing profitability metrics.3 In a world of structurally higher interest rates, this continues to underpin our preference for high quality, primarily large cap, U.S. companies.
The flip side to this remarkable performance, however, is a historic rise in concentration: market cap-weighted indices like the S&P 500 are as concentrated as they have ever been. Thirty years ago, the top 20 names in the S&P 500 represented about 28% of the total index. Today, the top 20 names account for over 40%.4
The same phenomenon is happening at a global level as well, where the share of U.S. equities in global indexes has also reached record highs. In 2005, the U.S. made up just 50% of the MSCI All Country World Index (ACWI) universe (Figure 3). Twenty years of American exceptionalism later, that number has climbed to 64% (Figure 3).
While an overweight position in U.S. large caps has paid off over the last decade and a half, concentration risk is still a top cited concern amongst investors we speak to. As leadership narrows, headline-level returns are increasingly beholden to a smaller list of constituents and countries, potentially making portfolios riskier overall.
Alongside the tailwind of a declining dollar, we favor international indexes as a diversification tool precisely because they have bucked the concentration trend. Since 2005, the three largest countries in MSCI ACWI ex-USA Index — the U.K., Japan and France — have steadily ceded ground, with their combined weight declining as leadership has broadened out.5
Source: BlackRock, MSCI, Morningstar. As of June 1, 2025. Weightings subject to change.
Chart description: Line chart looking at the weight in ACWI Index for the U.S., U.K., and Japan from 2005 to 2025.
Source: BlackRock, MSCI, Morningstar. As of June 1, 2025. Weightings subject to change.
Chart description: Line chart looking at the weight in ACWI ex-USA Index for the U.K., Japan, and France from 2005 to 2025.
As investors look to build more balanced portfolios — with H1’s performance a stark reminder of why — we prefer international equities as potential diversifiers to large-cap U.S. stocks. International equities have delivered both lower volatility and lower correlation relative to the S&P 500 than small caps over the last decade.6 That relationship is emphasized in drawdown periods: since 2010, when the S&P 500 posted negative quarterly returns, small caps underperformed significantly — posting nearly double the losses of developed markets. In fact, since 1999, in months when the S&P 500 was down, small caps were always down by more than international equities.7
In addition to their dimmer diversification prospects, the macro outlook also remains a headwind for small caps. Smaller, riskier companies have tended to perform best when we are coming out of a recession — not when we see U.S. growth slowing in the quarters ahead.8
International markets often have different drivers of risk and return than U.S. ones. One way to quantify these differences is by factor breakdown. The U.S. has long benefitted from its inherent growth tilt, while both developed and emerging markets often exhibit higher exposure to the value factor, with higher dividend and earnings yields than their U.S. counterparts.9 By incorporating international equities into a diversified portfolio, investors may benefit from structural geopolitical or thematic forces, while also offsetting some of the inherent growth bias within their U.S. equity sleeves.
The alpha generated by factor tilting is even greater in international markets than it is in U.S. ones, making factor investing a compelling implementation style for those looking to add exposure. Currently, we favor the quality factor in international markets, which screens for companies that have the earnings stability and cash flows to weather a volatile geopolitical backdrop. The quality factor also exhibits an asymmetric up/down capture profile — meaning it has historically participated to a greater degree on the upside than on the downside.10
Home country bias is a perennial theme among U.S. investor portfolios. The average advisor is overweight U.S. equities, with allocations continually increasing over the past decade. Our analysis of more than 20,000 portfolios showed that, on average, advisors allocate as much as 77% of their stock sleeves to U.S. companies11 — compared to a 64% weighting in MSCI All Country World Index.12
But recent polling data suggests that trend may soon reverse.13Â Many advisors see opportunity in international equities: the exposure captured the largest share of bullish sentiment in our most recent poll with 43% considering adds in the next 3-6 months. We believe that increased demand could be a catalyst for a further move higher.
U.S. investors interested in adding to international exposures via the ease and tax-efficiency of exchange traded funds (ETFs) may consider:
iShares ETFs are available to purchase through a brokerage account or with a financial advisor.
iShares funds are available through online brokerage firms. All iShares ETFs and ETPs trade commission free online through Fidelity.
By clicking on the button below, you will leave BlackRock’s website.
Contact a financial professional to discuss how iShares ETFs and ETPs can fit in your investment portfolio.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares ETF and BlackRock Fund prospectus pages. Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal.
Any links to third-party websites are provided for use at your own discretion. Each third party is solely responsible for the content presented and availability of its website. BlackRock does not control, monitor or maintain third-party websites, their content or the products/services they offer. Content may change without notice. When you leave BlackRock’s website and enter a third-party website, you will be subject to that site’s terms, policies and/or notices, including those related to privacy and security, as applicable. Please review those policies and notices on the third-party website.
Before engaging Fidelity or any broker-dealer, you should evaluate the overall fees and charges of the firm as well as the services provided. Free commission offer applies to online purchases of select iShares ETFs in a Fidelity account. The sale of ETFs is subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain Fidelity Brokerage Services platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRockâ€).
©2024 BlackRock, Inc or its affiliates. All Rights Reserved. BLACKROCK, iSHARES, iBONDS, LIFEPATH, ALADDIN and the iShares Core Graphic are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
iCRMH1124U/S-3985892
iShares ETFs are available to purchase through a brokerage account or with a financial advisor.
iShares funds are available through online brokerage firms. All iShares ETFs and ETPs trade commission free online through Fidelity.
By clicking on the button below, you will leave BlackRock’s website.
Contact a financial professional to discuss how iShares ETFs and ETPs can fit in your investment portfolio.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares ETF and BlackRock Fund prospectus pages. Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal.
Any links to third-party websites are provided for use at your own discretion. Each third party is solely responsible for the content presented and availability of its website. BlackRock does not control, monitor or maintain third-party websites, their content or the products/services they offer. Content may change without notice. When you leave BlackRock’s website and enter a third-party website, you will be subject to that site’s terms, policies and/or notices, including those related to privacy and security, as applicable. Please review those policies and notices on the third-party website.
Before engaging Fidelity or any broker-dealer, you should evaluate the overall fees and charges of the firm as well as the services provided. Free commission offer applies to online purchases of select iShares ETFs in a Fidelity account. The sale of ETFs is subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain Fidelity Brokerage Services platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRockâ€).
©2024 BlackRock, Inc or its affiliates. All Rights Reserved. BLACKROCK, iSHARES, iBONDS, LIFEPATH, ALADDIN and the iShares Core Graphic are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
iCRMH1124U/S-3985892
iShares ETFs are available to purchase through a brokerage account or with a financial advisor.
iShares funds are available through online brokerage firms. All iShares ETFs and ETPs trade commission free online through Fidelity.
By clicking on the button below, you will leave BlackRock’s website.
Contact a financial professional to discuss how iShares ETFs and ETPs can fit in your investment portfolio.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares ETF and BlackRock Fund prospectus pages. Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal.
Any links to third-party websites are provided for use at your own discretion. Each third party is solely responsible for the content presented and availability of its website. BlackRock does not control, monitor or maintain third-party websites, their content or the products/services they offer. Content may change without notice. When you leave BlackRock’s website and enter a third-party website, you will be subject to that site’s terms, policies and/or notices, including those related to privacy and security, as applicable. Please review those policies and notices on the third-party website.
Before engaging Fidelity or any broker-dealer, you should evaluate the overall fees and charges of the firm as well as the services provided. Free commission offer applies to online purchases of select iShares ETFs in a Fidelity account. The sale of ETFs is subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain Fidelity Brokerage Services platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRockâ€).
©2024 BlackRock, Inc or its affiliates. All Rights Reserved. BLACKROCK, iSHARES, iBONDS, LIFEPATH, ALADDIN and the iShares Core Graphic are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
iCRMH1124U/S-3985892
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1 Bloomberg, as of June 23, 2025, U.S. Dollar Spot Index.
2 Magnificent 7 stocks representative of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. As of June 23, 2025. Specific companies or issuers are mentioned for educational purposes only and should not be deemed as a recommendation to buy or sell any securities. Any companies mentioned do not necessarily represent current or future holdings of any BlackRock products. For actual fund holdings, please visit the respective fund product pages.
3 Source: Morningstar, as of June 23, 2025.
4 Bloomberg. As of June 23, 2025.
5 Bloomberg. As of June 23, 2025.
6 Bloomberg, as of June 23, 2025.
7 Bloomberg, as of June 23, 2025. Small caps represented by the Russell 2000 Index. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
8 Bloomberg, as of June 23, 2025. Small caps represented by the Russell 2000 Index. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
9 BlackRock, Morningstar, as of 12/31/2024.
10 Bloomberg, as of June 23, 2025. Quality represented by the MSCI World ex USA Sector Neutral Quality Index. Up/down capture ratios explain how well investments do when the market goes up or down. Up capture is how much the investment gains when the broad market rises, like the Foreign Large Blend Morningstar Category in this case, and down capture is how much the investment losses when the market was falling.
11 Source: Morningstar, BlackRock, Aladdin. “Advisor models†data is as of 5/31/25. “BLK model†allocations as of 5/20/25. For illustrative purposes only. Allocation data compares the Target Allocation Hybrid with Alternatives 60/40 fixed income and alternative model holdings as of 2/27/25 to the average fixed income and alternatives sleeve across 4,984 “moderate†risk cohort models collected by BlackRock in the 12 months ending 4/30/25. Duration compares the average duration of the 4,984 “moderate†advisor models collected by BlackRock in the 12 months ending 4/30/25 with the Target Allocation ETF 60/40 model portfolio duration as of 5/20/25. Advisor models collected by BlackRock are grouped into 5 risk cohorts for analysis, based on total equity allocation. Models in the “moderate†risk cohort are defined as any portfolio with an overall equity allocation of between 50-65%. BlackRock’s risk model data is supplemented by asset allocation and fund characteristic data from Morningstar. The portfolios analyzed represent a subset of the industry, and not its entirety. As such, there may be certain biases present in the data that reflect the advisors who choose to work with BlackRock to analyze their portfolios. See Important Notes slide for descriptions of each category. The Target Allocation Hybrid with Alternatives portfolio shown should not be relied upon as research, investment advice or a recommendation regarding Funds or any security in particular. This information is strictly for illustrative and educational purposes and is subject to change. Allocations are targets and subject to change.
12 Source: MSCI as of June 1, 2025.
13 Insights from BlackRock client polling data, as of June 23, 2025. Findings are based on responses collected from a sample of 560 unique participants.
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Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares Fund and BlackRock Fund prospectus pages. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This material may contain “forward-looking†information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this material is at the sole discretion of the viewer.
Diversification and asset allocation may not protect against market risk or loss of principal.
Active funds are subject to management risk, which means the fund manager's techniques may not produce desired results, and the selected securities may not align with the fund's investment objective. Legislative, regulatory, or tax developments may also affect the fund manager's ability to achieve the investment objective.
There can be no assurance that performance will be enhanced or risk will be reduced for funds that seek to provide exposure to certain quantitative investment characteristics ("factors"). Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. In such circumstances, a fund may seek to maintain exposure to the targeted investment factors and not adjust to target different factors, which could result in losses.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the value of debt securities. Credit risk refers to the possibility that the debt issuer will not be able to make principal and interest payments.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Bloomberg, BlackRock Index Services, LLC, Cboe Global Indices, LLC, Cohen & Steers, European Public Real Estate Association (“EPRA® ”), FTSE International Limited (“FTSE”), ICE Data Indices, LLC, Nasdaq, Inc., NSE Indices Ltd, JPMorgan, JPX Group, London Stock Exchange Group (“LSEG”), MSCI Inc., Markit Indices Limited, Morningstar, Inc., Nasdaq, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), Nikkei, Inc., Russell, S&P Dow Jones Indices LLC or STOXX Ltd. None of these companies make any representation regarding the advisability of investing in the Funds. With the exception of BlackRock Index Services, LLC, who is an affiliate, BlackRock Investments, LLC is not affiliated with the companies listed above.
Neither FTSE, LSEG, nor NAREIT makes any warranty regarding the FTSE Nareit Equity REITS Index, FTSE Nareit All Residential Capped Index or FTSE Nareit All Mortgage Capped Index. Neither FTSE, EPRA, LSEG, nor NAREIT makes any warranty regarding the FTSE EPRA Nareit Developed ex-U.S. Index, FTSE EPRA Nareit Developed Green Target Index or FTSE EPRA Nareit Global REITs Index. “FTSE®” is a trademark of London Stock Exchange Group companies and is used by FTSE under license.
©2025 BlackRock, Inc or its affiliates. All Rights Reserved. BLACKROCK, iSHARES, iBONDS, LIFEPATH, ALADDIN, THE MARKET IS YOURS and the iShares Core Graphic are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
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