Investing Ideas

Why active investing works in international equities

Fidelity research suggests active international allocations have topped index funds over time.

By: Bryan Sajjadi Seth Marks Burr Clark Vino Ravichandran
Updated: 6/17/2025
Key Takeaways
  • Many international equity investors have continued to prefer index-based exposures, even though Fidelity research concludes that active approaches in international equity markets have topped the performance of index funds over time.
  • Active managers can use their expertise regarding local laws and regulations and the competitive environment to avoid problematic international securities and segments.
  • The economic backdrop for inflation, geopolitics, and monetary policy could result in a broader range of potential winners and losers across multiple investment categories in the years to come, implying there may be greater opportunities for active managers across regions and countries.
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This content contains statements that are "forward-looking statements," which are based upon certain assumptions of future events. Actual events are difficult to predict and may differ from those assumed. There can be no assurance that forward-looking statements will materialize, or that actual results will not be materially different from those presented.

Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or a solicitation to buy or sell any securities. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

Investing involves risk, including risk of loss.

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets.


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