10 Best Performing International ETFs of 2025

International ETFs have been one of the strongest areas of the market in 2025. Through Aug. 19, the Vanguard Total International Stock ETF (VXUS) is up 22% year-to-date, more than double the 9% return of the U.S.-focused Vanguard Total Stock Market ETF (VTI).

Several factors explain the gap. Unpredictable U.S. trade policy has weighed on domestic stocks, leading investors to favor international markets. Governments abroad are also boosting growth with fiscal stimulus, while in the U.S., the Department of Government Efficiency (DOGE) has focused on cutting spending. 

International stocks also started the year cheaper than U.S. stocks after a decade of underperformance, leaving more room for a rebound. On top of that, the U.S. dollar has dropped 9% this year, lifting returns for funds that hold stocks denominated in foreign currencies.

Here are the top-performing international ETFs so far this year (excluding leveraged and inverse funds):

European Defense

European defense companies are seeing strong demand as governments raise military budgets in response to geopolitical risks. The Select STOXX Europe Aerospace & Defense ETF (EUAD), which holds aerospace and defense firms across Europe, has surged by 71% as investors bet that higher defense spending will continue for years.

Greece

Greece has rallied on the possibility of being upgraded from “emerging” to “developed” market status by major index providers. That change would force buying from developed-market index funds. 

A Moody’s upgrade of Greece’s credit rating to investment grade in March and ongoing improvements in government finances and the banking sector have added to the momentum, fueling a 71% gain for the Global X MSCI Greece ETF (GREK). 

Poland

Poland’s economy is one of the fastest growing in Europe, expanding at more than 3% in recent quarters. The government has pledged tens of billions of euros for new transport and energy projects, including its first nuclear power plant planned for 2026. That growth outlook has helped push the iShares MSCI Poland ETF (EPOL) up by 65%.

Spain

Spain’s stock market has been one of Europe’s standouts in 2025. Financials, which make up 43% of the iShares MSCI Spain ETF (EWP), and utilities, which account for another 22%, have delivered solid earnings and driven much of the outperformance. EWP is up 58% year-to-date. 

Austria

Austria has also rallied strongly, with the iShares MSCI Austria ETF (EWO) up 58%—matching EWP. Like Spain, the Austria market is dominated by financials (roughly half the index), which have benefited from higher interest rates. Broader regional strength, helped by German stimulus measures and improving economic sentiment, has also lifted Austrian shares.

Vietnam

Vietnam has surged on both reforms and speculation. The government announced a four-part plan to secure an upgrade from frontier- to emerging-market status by 2027, which could attract significant new inflows. 

A booming economy hasn’t hurt, with GDP up about 8% in the second quarter. At the same time, heavy margin borrowing by retail traders has added fuel to the fire, making Vietnam one of the year’s hottest markets.

The VanEck Vietnam ETF (VNM) is up 56% so far this year, while the Global X MSCI Vietnam ETF (VNAM) is up by 49%.

Germany

Germany is leading Europe’s fiscal and defense push. The government plans to spend hundreds of billions of euros on infrastructure and military projects, raising expectations for growth. The First Trust Germany AlphaDEX Fund (FGM), which uses a stock-selection strategy tilted toward growth and value factors, has been a beneficiary of that optimism. It’s up 51% year-to-date. 

European Financials

European banks are benefiting from higher interest rates after years of pressure under low-rate policy. Rising borrowing costs and increased credit demand from governments funding fiscal expansion have improved margins. That backdrop has lifted the iShares MSCI Europe Financials ETF (EUFN) to a 50% gain.

China

China’s market has rebounded in 2025 despite tariffs and longer-term challenges. The broad iShares MSCI China ETF (MCHI) is up 27%, but small caps have done even better, with the iShares MSCI China Small-Cap ETF (ECNS) rising by 50%.

Tariffs on Chinese exports spiked early this year before the U.S. and China reached a temporary truce, with Beijing leveraging its dominance in rare earths to push back. Tariffs remain higher than last year but are less severe than feared. 

Meanwhile, concerns about demographics and property debt still hang over the market, though low valuations and China’s leadership in areas like electric vehicles, alternative energy, and robotics continue to give investors reasons keep exposure to the market.

The Bottom Line

International ETFs have been clear winners this year. Stronger fiscal support abroad, more attractive starting valuations, and a weaker dollar have all contributed to their outperformance. For investors who stuck with global diversification, 2025 has been a payoff year.

For a full list of the 10 best performing international ETFs of 2025 so far, see the table below: