How Did U.S. Equities ETFs Fare in 2025?
After a rare year of underperformance, U.S. equities remain structurally strong and difficult to replace in a long-term portfolio.
In 2025, following liberation day and the pivot away from US equities, a specific question began to arise: Is the era of US outperformance over? While the spirit of the question reflected the elevated degree of uncertainty that was present, it also underscored the level of outperformance US equities have exhibited in recent years.
US Equities: Outperforming the World
From January 2009 to December 2024, the MSCI USA Total Return Index generated approximately two times the return of the MSCI World Ex USA Total Return Index. Though 2025 was an underperforming year for US equities, relative to its recent history, investors have benefited immensely from maintaining their exposure to the asset class. To put this in further context, as noted in JP Morgan’s 2026 Outlook, 2025 was the first of the last 15 years in which investors would have achieved higher cumulative returns by switching from the S&P 500 index to the MSCI World Ex-US Index.
US Equities: Still rewarding investors
Though the current market environment still has a material measure of uncertainty present due to President Trump’s trade policies and unprecedented geopolitical actions, the performance of US equity sectors relative to their global peers remains comparably better. As captured in the previously mentioned JP Morgan report, the 2025 return on equity (RoE) and return on assets (RoA) were higher than those of non-US counterparts.
Gaining Exposure to US Equities
For Canadian investors seeking exposure to US equities, the ETF offerings are robust. The ETF Market Canada screener lists 121 long-only, large- and mid-cap US-focused ETFs for consideration; when option-investment strategies are included, the number of available ETFs increases. For investors interested in solutions that provide broad US market exposure, the iShares US Fundamental Index (Tickers: CLU/CLU.C), CI U.S. 500 Index (Tickers: CUSA/CUSA.B), and Franklin FTSE U.S. Index (Ticker: FLAM) are a few, among many US equities-focused ETFs that investors can consider.
Takeaway
Despite recent market developments and the 2025 underperformance of US equities, the asset class remains a vital component of a portfolio. While the current market environment has seen investors pivot to other equity exposures and asset classes, maintaining exposure to US equities has proven beneficial in the long term.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
