Top 3 Index Funds That Surged Over 20 % in 2025

While U.S. equities delivered solid returns in 2025, several international benchmarks outpaced them as investors rotated capital toward markets with attractive valuations and diversified exposures. Amid this shift, a handful of index‐tracking funds achieved double-digit gains, driven by regional performance, macro trends and changing risk appetites. This article highlights the three standout index funds that delivered the strongest returns last year and explores what it means for portfolio diversification in 2026.

Surprising performance outside the US

The year 2025 brought surprising results for global equity markets. The traditional story of US dominance in equity returns was partially overshadowed by the fact that most international indices ended the year with higher valuations than the major US benchmarks. In fact, some regional indices, such as those from emerging markets, outperformed the most closely watched S&P 500 or Nasdaq by a wide margin.

The trend of capital shifting to other…