As we wrote in our blog “Investing across the globe” in March 2025, diversification of an investment portfolio is best achieved not only by allocating assets across different asset classes and sectors, but also across different geographic regions.
As one of the most developed, largest, and most liquid markets, the US equity market remains one of the most popular investment destinations. However, the current environment calls for a more selective approach. Uncertainty around US foreign policy, a change in the Federal Reserve chair, and heightened political rhetoric ahead of the midterm elections could lead to elevated volatility in the US market in 2026.
In this blog, we invite investors to consider several investment opportunities outside the United States.
Ex-US Equity ETFs
The simplest way to gain exposure in this context is through an exchange-traded fund investing across a broad range of regions outside the US. For example, the Vanguard FTSE All-World ex-US ETF tracks the performance of the FTSE All-World ex-US Index. The fund holds more than 2,400 stocks across all market capitalizations—from large-cap to small-cap—and is diversified across countries worldwide, excluding the United States.
Key risks include geopolitical conflicts and trade wars, as well as elevated valuations if asset prices have already risen significantly relative to underlying earnings.
Saudi Arabia
In 2025, Saudi Arabia’s equity market (Tadawul) underperformed major emerging markets. The main pressures on equity indices were moderate oil prices and tight monetary policy, which constrained liquidity in the banking sector. An additional factor was the strategic “recalibration” of the Vision 2030 program, as the government revised priorities and timelines for several mega-projects (including NEOM) to avoid overheating the economy and to optimize fiscal spending.
The key potential growth driver is further liberalization of access for foreign investors. While formal restrictions in many sectors have already been lifted, the decisive step will be the full removal of operational barriers and alignment of ownership rules with international standards (100% free accessibility). This could prompt index providers such as MSCI and FTSE Russell to increase Saudi Arabia’s Foreign Inclusion Factor. If the country’s weight in the MSCI Emerging Markets Index is raised to full market capitalization, this could trigger substantial passive capital inflows.
The main risks to this scenario are delays in regulatory changes and in index reclassification decisions. Persistently low oil prices could also force the government to cut capital expenditures further, negatively affecting earnings in the construction and industrial sectors.
Investment in the region is available through the iShares MSCI Saudi Arabia ETF.
Singapore
In 2024, Singapore’s Straits Times Index (STI) delivered a total return of approximately 23.5%, its best performance in more than a decade, bringing the index close to its 2007 all-time high. The market continued to rise in 2025, ending the year with a total return of 28.8% including reinvested dividends. This performance reflects favorable conditions, including a stable and strengthening Singapore dollar and the market’s reputation as a safe and stable destination amid global geopolitical tensions.
Between 2024 and 2026, the Monetary Authority of Singapore and the Singapore Exchange implemented a comprehensive plan to revitalize the equity market. This included the Equity Market Development Programme with a budget of 5 billion Singapore dollars, tax incentives, and measures to improve liquidity, particularly for small- and mid-cap companies. Initiatives to attract new initial public offerings were launched in parallel, ranging from tax incentives and preparation of a dual-listing mechanism between the Singapore Exchange and Nasdaq to simplified listing rules and expanded independent research coverage. As a result, the number of IPOs on the Singapore Exchange in 2025 reached a six-year high, while the Straits Times Index set a new 17-year record.
Investment in the region is available through the iShares MSCI Singapore ETF .
South Korea
In 2025–2026, the South Korean equity market staged a powerful rally, transforming from an underperformer into one of the main beneficiaries of the global artificial intelligence boom. After a decline in 2024, the KOSPI Index surged by 76% and gained an additional 20% in early 2026, reaching a new all-time high. Key drivers included shares of Samsung Electronics and SK Hynix.
A major structural factor was a broad improvement in corporate governance under the Corporate Value-Up Program, aimed at reducing the so-called “Korean discount.” In June and July 2025, amendments to the Commercial Code strengthened directors’ fiduciary duties toward all shareholders, expanded minority shareholder rights, and introduced electronic shareholder meetings and new voting procedures. In addition, the Financial Services Commission of Korea and the Ministry of Justice launched initiatives to improve corporate disclosure, voting systems, and executive compensation practices, increasing transparency and investor confidence. The postponement of capital gains tax reform—particularly for large shareholders—also supported market liquidity and reduced regulatory uncertainty.
Risks remain. The market has risen very rapidly, and part of the rally was likely driven by inflows into exchange-traded funds rather than fundamentals alone. A reversal of these flows could trigger a sharp and swift correction. Additional external risks include potential US tariff measures and weak domestic demand, which constrain the broader economic outlook.
Investment in the region is available through the iShares MSCI South Korea ETF .
Brazil
Brazil’s investment appeal in 2026 is largely based on expectations of a shift in monetary policy. The country has one of the highest benchmark interest rates among major economies, at around 15%. Rate cuts could create the conditions for a strong equity rally. Brazilian equities trade at a discount to other emerging markets while offering attractive dividend yields.
Brazil’s exports to the United States are relatively limited (around 12% of total exports), making the economy more resilient to changes in US trade policy or the introduction of tariffs compared with Asian emerging markets. Brazil is a global leader in exports of soybeans, coffee, and sugar, and is also among the largest exporters of iron ore, beef, and crude oil.
The main risk remains fiscal uncertainty ahead of the 2026 presidential elections. Populist rhetoric could fuel inflation and force the central bank to keep interest rates high for longer than expected. External risks include commodity price fluctuations and currency volatility.
Investment in the region is available through the iShares MSCI Brazil ETF .
United Arab Emirates
For a long time, the UAE equity market traded at a noticeable discount to markets such as the United States and India. This was due to the dominance of the banking and real estate sectors, historically low free float levels, and investors’ psychological dependence on oil prices. Today, however, the market structure is changing rapidly.
A wave of IPOs in the energy, logistics, and retail sectors has diversified the market and improved liquidity, reducing sensitivity to oil price movements. The UAE’s status as a politically stable “safe haven” with no personal income tax continues to attract record inflows of capital and high-net-worth individuals. This inflow is reinforced by double-digit population growth in Dubai and Abu Dhabi, providing a strong фундамент for earnings growth in consumer-oriented and construction sectors.
Having been classified as an Emerging Market since 2014, the UAE is now actively preparing for a transition to Developed Market status. A key milestone was the country’s removal from the Financial Action Task Force (FATF) grey list in 2024, opening the door to more conservative Western institutional investors. From 2026 onward, the introduction of a new regulatory framework and stronger minority shareholder protections make this transition increasingly likely, potentially unlocking significant passive capital inflows. ** Investment in the region is available through the iShares MSCI UAE ETF .**