T. Rowe Price International Equity ETF

TOUS

Market cap $1.21B

On this special episode of the “ETF of the Week” podcast, VettaFi's Head of Research, Todd Rosenbluth, reviewed some of his favorite ETF of the Week picks from 2025 with Chuck Jaffe of Money Life.  Chuck Jaffe: One fund on point for today.

With just a few weeks left in 2025, investors are looking to take observations from 2025 and act on them in the new year. One area that has stood out and may be poised to do so again is international, with 2025 producing robust returns for international ETFs.

If asked to pick a big story for markets in 2025 outside of A.I., it's hard to look past the consistent strength of international equities ETFs.

Active ETFs are gaining traction with investors as lower fee structures improve the odds that fund managers can outperform passive benchmarks, according to a recent Morningstar report.

Looking at emerging market investing options? Ex-U.S. equities — emerging markets included — have been robust performers for portfolios this year, providing a strong source of upside outside of AI-infused megacap tech stocks.

TOUS offers active management in developed markets, but its deviations from passive benchmarks are conservative and don't deliver significant alpha. Performance slightly outpaces EFA and VEA, but outperformance is inconsistent and not substantial enough to justify higher fees. Yield is lower and expenses are higher than major passive peers, making the cost-benefit of TOUS less attractive for most investors.

International equities have stood out in an uncertain 2025, providing diversification and a big boost to portfolios amid tariff uncertainty. That said, not all equities strategies are created equal.

2025 has been strong for international equities, and international ETF TOUS has proved no exception. The active international ETF has performed very well amid some notable domestic turbulence for U.S. investors.

The ETF wrapper provides a number of benefits for investors, combining tax-efficiency with cost savings. In more complex asset classes such as international equities, investors potentially compound the benefits of ETFs with those of active management.

Outside of the investing world, the terms “global” and “international” are generally used as synonyms for each other, describing the same fundamental premise. However, when investing, these terms convey two significantly different approaches to gaining overseas exposure.