Vanguard FTSE Developed Markets ETF

VEA

Market cap $221B

A look at ETF flows for the month of March suggests caution is back in vogue. Fixed income ETFs showed serious muscle in the asset gathering race last month, capturing nearly 45% of net creations.

U.S. equities continue to languish as the conflict in Iran dominates the market narrative. With no end in sight, investors have a few different ways to approach portfolio positioning heading into Q2.

Developed markets are offering improved diversification as correlations to U.S. equities decline. Valuation spreads favor international stocks, suggesting more attractive forward returns. VEA provides low-cost, highly diversified exposure with strong liquidity and minimal concentration risk.

Investors have been diversifying away from U.S. stocks for months. REITs look more attractive as interest rates look like they'll go lower.

Since President Donald Trump rolled out his landmark “Liberation Day” tariffs on April 2 last year, U.S.

The U.S. stock market has underperformed many international stock markets year to date, due in part to concerns about how tariffs will affect the U.S. economy. The Vanguard FTSE Pacific ETF provides heavy exposure to stocks in Japan, South Korea, and Australia; the fund has advanced 18% year to date.

Almost 1,000 active ETFs launched in 2025, but did their performance substantiate the demand? Across the universe of funds, active managers for ETFs and mutual funds found that outperformance was elusive compared to their passive peers based on the latest Morningstar US Active/Passive Barometer report.

Both VEA and SPDW offer ultra-low expense ratios and similar one-year returns. VEA holds a much larger number of stocks and manages significantly more assets under management (AUM).

Roxanna Islam, head of sector and industry research at VettaFi, joined Nate Geraci on this week's ETF Prime to discuss record international equity flows. The category saw net inflows of over $220 billion in 2025 with momentum continuing into 2026 at roughly $75 billion year-to-date.

Advanced economy and emerging market stocks outperformed U.S. stocks last year. That momentum continues as those stocks are crushing U.S. stocks so far in 2026.