It was tough to stand out under the long shadow cast by AI investing this year, but foreign
equities absolutely did. Amid tariff turmoil and a declining dollar, ex-U.S. equities offered
diversification and major returns. That helped plenty of foreign equities ETFs, especially those in
the active column, deliver for their investors. What does that mean for 2026, then? This sleeper
foreign equities ETF could be poised for a big year and may merit investor attention.
See more: Japan Carry Trade Risk: What You Can Do Now
The T. Rowe Price International Equity Research ETF (TIER) launched in June with a clear aim
to set itself apart from other foreign equities ETF options. Its active approach already gives it
some notable advantages relative to passive options, but its strategy offers more than just
active.
The active foreign equities ETF charges a competitive 38 basis point (bps) fee for a specialized
approach to foreign equities. The strategy has performed well since inception, returning 11.7%
since launch per YCharts data.
What, then, might help the fund stand apart from others looking to invest in foreign equities?
TIER’s portfolio is designed to have similar geographical and sector exposures to the MSCI
ACWI (ex USA) Index. However, TIER leans into T. Rowe Price’s fundamental research
capabilities to craft its final allocations. Rather than simply owning the index holdings, the ETF
actively seeks to outperform the index through strict security analysis.
It’s that bottom-up process, leaning on the firm’s fundamental research strengths, that deserves
a closer look. Active already has strengths compared to passive international equities, adapting
to events or key macro trends as needed. A fundamental focus, however, can really help in
foreign markets where reduced access to information can be a challenge.
That’s why an active foreign equities ETF like TIER could stand out from the pack next
year. Where earlier this year numerous foreign equities ETFs benefitted from Liberation Day
and broad spikes for foreign markets, those key trends may not have impacts as widely
distributed in 2026. Opportunities still abound abroad, but finding them may require closer
scrutiny and deeper analysis – the kinds available in a fund like TIER.
For more news, information, and strategy, visit the Active ETF Content Hub.
