US vs developed ex-US over 15 years?
This page compares 15 years of steady monthly investing into an S&P 500 ETF (SPY) and a developed-ex-US ETF (EFA), using the comparison calculator. It examines the case for 'US exceptionalism' alongside the cost of country diversification.
Investment conditions
Asset · S&P 500 ETF (SPY) vs Developed ex-US ETF (EFA)
Method · Comparison
The key is that country diversification has two sides—'cost' and 'insurance.' Judged only over the past 15 years, concentrating in the US produced larger returns, and adding developed ex-US effectively lowered returns. But that only reflects looking back at a stretch when the US led; which region leads in the future is unknown. In the comparison calculator, review each market's ending balance together with its maximum drawdown and recovery period. The purpose is to understand, in the data, the trade-off between concentrating in one region and diversifying.
Open in comparison calculatorWhy this period and asset
EFA comprises developed-market stocks outside the US, including Europe, Japan, and Australia. Over the past 15 years, US stocks rose strongly under Big Tech leadership, while developed ex-US markets often lagged. That pattern gave momentum to the so-called 'US exceptionalism' narrative that the US is structurally superior. Historically, though, regional leadership has rotated, and in the early-to-mid 2000s developed ex-US markets outpaced the US at times. That is why the recent US lead cannot be assumed to be permanent.
Caveats & limits
This comparison reflects one specific past period, and which side leads can change with the start or end date. Past performance does not guarantee the future, and regional leadership has rotated. In real investing, fees, taxes, and exchange rates (for dollar-denominated assets) affect outcomes. This page recommends no purchase; it is educational material comparing character.
Data sources & limits
- Trading fees and taxes are not reflected — figures are pre-tax.
- Based on historical data; does not guarantee future returns.
Frequently asked questions
Which is better, the US or developed ex-US?
Neither is always better. The US led over the past 15 years, but developed ex-US led at times in the 2000s. Since regional leadership rotates, use the comparison calculator to view them side by side.
How do the risks differ?
Developed ex-US markets have currency and cycle patterns that differ from the US and can add diversification, but in certain stretches they may lag the US or have larger drawdowns. Review maximum drawdown and recovery period together.
What should I use as the basis for comparison?
Look beyond the final return to maximum drawdown, time underwater, and recovery period. Understanding the trade-off between regional concentration and diversification is what matters.
Related scenarios
📋 Results are based on historical data; past returns do not guarantee future returns.
📋 This service is provided for educational purposes to help you understand investing, not as investment advice.
⚠️ Volatility and risk levels differ by asset, so returns alone cannot determine which is better.