While the North American investing landscape shows elevated valuations and some notable concentration risk, international equities, by contrast, appear to offer a different set of opportunities. Lower relative valuations in certain ex-North American markets, coupled with specific macroeconomic cycles, and geographical diversification are just a few of the myriad factors that investors are considering. In this environment, active management may provide a more structured approach to navigate these markets.
Beyond Domestic Concentration
With some core allocations largely reflecting heavy exposures to global technology companies, international equities may serve as a diversifier. According to analysis from J.P. Morgan Asset Management, international equities rose approximately 31% in U.S. dollar terms as of November 2025.
This year, some foreign markets continue to attract more investor demand as central banks adjust interest rates or provide exposure to specific commodity sectors. Consequently, international equity ETFs are often utilized in a ""satellite" role within a portfolio":https://money.tmx.com/content-hub/active-etfs-content-hub/what-core-satellite-strategy, acting as smaller, specialized additions to a portfolio designed to complement a larger, more stable core of domestic investments. The ETF structure allows these exposures to be integrated alongside core holdings.
Funds like the JPMorgan International Developed Equity Active ETF (JIDE) may provide that exposure to ex-North America equities with an active investing twist. The strategy predominantly invests in developed markets like Japan, the U.K., Australia, Singapore, and Western Europe. The fund invests in securities across various market capitalizations, with a primary focus on large- and mid-cap companies. Operating without strict sector limits, the strategy employs a bottom-up portfolio construction process. This allows managers to evaluate individual firm data and adapt to market events.
Why Active Management Matters in 2026
Active management in international markets can be valuable due to market inefficiencies and dynamic risk management. Many non-North American markets have less analyst coverage, allowing active managers to uncover mispriced securities through proprietary research. They can also help to navigate volatility by avoiding sectors or regions affected by geopolitical events or currency swings. Additionally, active strategies tend to prioritize quality over quantity, focusing on financially strong companies rather than blindly tracking market-cap-weighted indices, helping to mitigate risks from broad passive benchmarks.