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Don’t Try International Equities Without Answering This Question

BY | ETF Database
08/11/2026 | 22 VIEWS
The international equities landscape continues to offer plenty of appeal in 2026. Since the start of the year, investors have been clamoring for opportunities to diversify away from concentration risk and red-hot valuations. International equities have been a good way to do so and still hold major appeal despite geopolitical chaos. Before diving in further, however, investors may want to examine their portfolios and answer one key question.Key Takeaways: International equities hold significant appeal as U.S. concentration risk grows, with just a few firms driving nearly 40% of the S&P 500. An active international equities ETF like TIER — which has returned 28% in the last 12 months — presents a compelling option. Leaning into active management offers a strong complement to passive core allocations. The question is whether a chosen strategy has enough information to capture the full potential of foreign markets. While passive index tracking is managed by capable and seasoned teams, passive models still face inherent structural limitations. For one thing, index strategies usually rebalance on a quarterly basis, which can be too slow for sudden market shifts — such as this year’s tumult over the Strait of Hormuz. Although index funds are intended to be held for longer, lagged rebalancing can cause diversifying positions to take big hits right when they’re needed to offset other areas of portfolio stress. Furthermore, while index strategies are managed by strong teams, their processes can still leave something to be desired. Simply picking out the top large-cap international equities stocks and ranking them by market cap can often fall short. Instead, active fundamental management can leverage research more efficiently to find promising companies before the major indexes catch on.Active International Equities: TIER Can Stand OutThat is where active strategies like the T. Rowe Price International Equity Research ETF (TIER ) stand out. TIER charges a 38 basis point fee to actively invest in global ex-U.S. stocks, focusing primarily on large caps while maintaining flexibility to allocate across the market cap spectrum. See more: Active Tech ETF TTEQ is Lapping Its Benchmark TIER uses a bottom-up approach, considering economic trends in addition to evaluation of individual companies across industries, regions, and sectors. With these factors combined, the strategy has delivered 15.3% YTD return. Having launched last June, the active fund also boasts a 28% 12-month return. Overall, TIER is a solid diversifier that offers distinct active exposure beyond traditional passive funds. For more news, information, and analysis, visit our Active ETF Content Hub.

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