Best International Stocks for 2026: Outlook, Top Markets and How to Invest from Kenya

For more than a decade, US stocks seemed unbeatable. Then 2025 happened. Stock markets outside the US rose almost twice as much as the S&P 500, led by South Korea, Europe and Japan, and investors around the world started asking whether it was time to look beyond America.

For Kenyan investors, the question is a little different. Your home market is the Nairobi Securities Exchange, so "international" means everything else: US giants like Microsoft and Amazon, European banks, Japanese chipmakers and fast-growing emerging markets. Owning some of them is one of the simplest ways to diversify beyond the shilling and the local economy.

This guide covers how international stocks have performed in 2025 and 2026, what experts expect next, which markets and funds investors are watching, how much of a portfolio to keep abroad, and how to invest from Kenya.

What are international stocks?

International stocks, also called foreign stocks, are shares in companies listed outside your home country. Most global investing guides are written for Americans, so they use "international" to mean non-US stocks. For a Kenyan investor, the US is international too.

Investors usually group the world into three buckets:

• The US: the world's largest stock market, home to companies such as Apple, Microsoft, Nvidia and Amazon.

• Developed international markets: Europe, the UK, Japan, Canada and Australia. The MSCI EAFE index is the common benchmark.

• Emerging markets: fast-growing economies such as China, India, Taiwan, South Korea and Brazil. The MSCI Emerging Markets index is the common benchmark.

The US is by far the largest market: it makes up about 64% of the MSCI All Country World Index, the most widely used global benchmark, as of September 30, 2026. Japan, Taiwan, the UK and Canada follow, each at roughly 3% to 5%. Kenya is a tiny fraction of the total, which is why international investing matters for Kenyan portfolios. If you only own Kenyan assets, you're missing most of the world's largest and most profitable companies.

How international stocks have performed

2025: The year international stocks won

In 2025, the MSCI All Country World ex-USA index returned 29.2%, compared with 16.4% for the S&P 500, according to CNN. Several markets had their best year in decades:

Three forces drove the rally: the US dollar index fell about 9.4%, its weakest year since 2017, which boosted foreign returns in dollar terms; Asian chipmakers benefited from the AI boom; and Germany's defence and infrastructure spending lifted European markets.

2026 so far: A closer race

2026 has been more mixed. Through September 30, 2026, total returns in US dollars were:

Markets outside the US are slightly ahead of the S&P 500 overall, but almost all of that lead comes from emerging markets, helped by AI and semiconductor demand in Asia. Developed international markets have trailed the US, where strong corporate earnings and AI-related investment have supported stocks. Results within regions have varied sharply: through July, Japan's Nikkei 225 was up 27.9% in local currency, while India's Nifty 50 was down 6.7% and China's CSI 300 was roughly flat, according to Chase.

International stock outlook for 2026 and beyond

Nobody can predict short-term market moves, but major investment firms have shared their views on where international stocks stand.

Are international stocks undervalued?

On most measures, international stocks are cheaper than US stocks. In June 2026, J.P. Morgan noted that stocks in developed markets outside the US traded at roughly a 25% discount to US stocks on a forward price-to-earnings basis, close to a record gap, as reported by investingLive. For context, FactSet put the S&P 500's forward P/E at 19.2 in late September 2026.

Cheap doesn't automatically mean a good buy, though. J.P. Morgan's point was that a discount draws attention but doesn't, on its own, pull money in. Investors have kept favouring US stocks because of strong AI-driven earnings growth.

Will international stocks outperform US stocks?

Forecasters are divided, and their views depend on the time frame:

• Over the next decade: Vanguard's latest 10-year forecasts, as of June 30, 2026, project annualised returns of 4.5% to 6.5% for developed markets outside the US, compared with 4.2% to 6.2% for US stocks and 2% to 4% for emerging markets. In other words, Vanguard sees only a slight edge for developed international stocks, and expects modest returns everywhere.

• For 2026: Schwab entered the year expecting international stocks to shine, citing overseas rate cuts, Germany's fiscal spending and attractive valuations. By June, its mid-year outlook noted that the US and emerging markets have typically outperformed developed international markets in this phase of the economic cycle.

What could move international stocks next?

• The US dollar. A weaker dollar raises the value of foreign holdings for dollar-based investors, as it did in 2025. A stronger dollar does the opposite.

• AI and semiconductors. Asian markets such as Taiwan, South Korea, and Japan are heavily tied to chip demand. That's a strength while AI spending grows, and a risk if it slows.

• Energy prices and geopolitics. The 2026 Middle East conflict pushed up oil prices, which hurts big energy importers such as India and much of Europe.

• Policy. Tariffs, interest rate decisions, and government spending, such as Germany's defence budget, can shift returns quickly.

Past performance doesn't guarantee future returns, and forecasts are often wrong. That uncertainty is one of the strongest arguments for owning both US and international stocks rather than betting on one.

International stocks and ETFs investors are watching

There's no single best international stock for everyone. What suits you depends on your goals, how much risk you can carry, and how long you plan to invest. Instead of a buy list, here's what the international market is made of and how investors typically get exposure.

The largest companies outside the US

These are the biggest holdings in the iShares MSCI ACWI ex U.S. ETF, a fund that tracks large and mid-sized companies across developed and emerging markets outside the US, as of August 20, 2026:

Source: StockAnalysis, ACWX holdings. Listed for information only, not as recommendations.

The list shows how heavily international markets lean towards Asian technology and European healthcare and banking, a different mix from the US, where large tech platforms dominate.

Types of international ETFs

Most investors get international exposure through funds rather than picking foreign stocks one by one. One fund can hold hundreds or thousands of companies.

Ndovu's ETF range covers several of these from USD 50, including a world fund tracking the MSCI World index, an emerging markets fund, an India fund and a China internet fund, alongside S&P 500 and sector ETFs.

Which global ETF is best?

The right global ETF depends on what you already own. Compare funds on:

• Coverage: Does it include the US, emerging markets, or both?

• Cost: Lower annual fees leave more of your return with you.

• Size and trading volume: Larger, frequently traded funds are usually easier to buy and sell at a fair price.

• Concentration: Check the top holdings and country weights so you know what you're really buying.

New to ETFs? Read our guide to what an ETF is and how it works [link once published].

Best countries and regions to invest in for 2026

There's no permanent winner. Each major market has its own drivers and risks, and leadership changes from year to year, as 2025 and 2026 have shown.

Rather than trying to pick the single best country, many long-term investors hold a broad global fund for most of their international exposure. They then add a smaller position in a region they believe in, sized so that a bad year won't derail their plans.

How much of your portfolio should be in international stocks?

You'll often see the "80/20" rule in US investing guides: 80% in US stocks and 20% in international stocks. That rule is written for Americans, whose home market is the world's largest. For a Kenyan investor, the starting point is different: your home market, the NSE, is small and concentrated in a handful of sectors such as banking and telecoms.

A few principles help:

• Global markets are mostly outside Kenya. If you held the world's stocks in proportion to their size, about 64% would be US companies, and almost none would be Kenyan.

• Your income and assets are already in Kenya. If you earn shillings and own Kenyan property, global stocks can balance that exposure, including currency exposure to the US dollar.

• Match the share to your goals and timeline. Money you'll need soon belongs in lower-risk options such as a money market fund. International stocks suit goals five or more years away.

• Diversify within international too. A broad global fund spreads risk across countries; a single-country fund concentrates it.

Is it worth investing in international index funds?

For many long-term investors, yes. A low-cost international index fund gives you exposure to thousands of companies in one purchase, spreads your risk beyond any one economy, and avoids the need to research foreign companies one by one. The trade-off is that you'll own markets that sometimes lag, as developed international markets have trailed the US so far in 2026.

The right mix depends on your circumstances. If you're unsure, a licensed financial adviser can help you set an allocation.

How to invest in international stocks from Kenya

Kenyan investors have several ways to reach global markets:

1. Global ETFs and fractional US shares through a licensed platform. On Ndovu, you can invest in global ETFs and fractional shares of US companies such as Microsoft, Amazon and Google from USD 50, without opening a foreign brokerage account. Our guide to investing in US stocks from Kenya walks through the process.

2. A global ETF listed on the NSE. The Satrix MSCI World Feeder ETF, listed on the Nairobi Securities Exchange in July 2025, gives exposure to large companies across developed markets. You buy it in shillings through a licensed stockbroker.

3. A professionally managed global fund. The Kibaba Special Fund is a CMA-regulated fund that invests across global asset classes, available in KES or USD, for investors with larger, long-term amounts.

For a broader introduction, see our beginner's guide to investing in international capital markets.

Risks to understand before investing abroad

• Currency risk. Global investments are usually priced in US dollars. If the shilling strengthens, your returns in shillings shrink, and the reverse is also true.

• Market risk. International stocks can fall sharply, as developed international markets did in September 2026.

• Concentration risk. Single-country and sector funds can swing far more than broad global funds.

• Tax. Dividends from US-listed funds and shares usually have 30% US withholding tax deducted for Kenyan investors, because Kenya has no tax treaty with the US. See our guide on whether index funds are taxed in Kenya for details [link once published].

• Platform risk. Only invest through platforms licensed by the Capital Markets Authority. Here's how to spot a legitimate investment platform.

Start investing globally with Ndovu

Ndovu is licensed by the Capital Markets Authority as a Fund Manager and Investment Adviser. Choose the next step that fits you:

• Want broad global exposure? Explore Ndovu's ETFs, including world, emerging markets, India, and S&P 500 funds, from USD 50.

• Prefer to own individual companies? Browse fractional US shares such as Microsoft, Amazon, and Google.

• Investing a larger sum? The Kibaba Special Fund offers professionally managed global exposure in KES or USD. Leave your details and the team will get in touch.

• Have questions first? Join Ndovu's free monthly live sessions or compare plans that include financial advice.

Disclosure:

Ndovu is a regulated Robo-advisory platform operated by Ndovu Wealth Limited (‘NWL’). NWL is a Fund Manager licensed by the Capital Markets Authority (Kenya).

The information provided on this platform and the products and services offered are intended solely for persons in regions and jurisdictions where such distribution and utilization are in accordance with local laws and regulations. Ndovu does not promote its services in regions where it lacks the necessary licenses; It is exclusively available to persons residing in countries where it holds a valid license or has regulated partners. Ndovu does not extend its services to citizens of the United States, Canada, Japan, and other restricted territories.

Disclaimer:

All ETF products are subject to risk, including country/regional, liquidity, and currency risks. Market prices of securities within the ETF may rise and fall, sometimes rapidly and unpredictably.

While ETFs provide diversification through exposure to a basket of securities, they do not eliminate the risk of loss. Diversification does not ensure a profit or protect against a loss. These are non-CIS products and are registered by the SEC.

Frequently asked questions

What are the best international stocks for 2026? 

There's no single best pick. The largest companies outside the US include TSMC, Samsung Electronics, ASML, Tencent, HSBC, and Roche. Many investors own them through a broad international or global ETF rather than buying individual foreign shares.

Will international stocks outperform US stocks in 2026? 

Nobody knows for certain. International stocks beat US stocks by a wide margin in 2025. In 2026, through September, emerging markets were ahead of the S&P 500, while developed international markets trailed it. Over the next decade, Vanguard projects slightly higher returns for developed international stocks than US stocks, and lower returns for emerging markets.

Are international stocks undervalued? 

They are cheaper than US stocks on most measures. In mid-2026, J.P. Morgan noted that developed markets outside the US traded at about a 25% forward P/E discount to US stocks. Cheaper valuations don't guarantee better returns, though.

What is the best country to invest in? 

It changes from year to year. In 2025, South Korea, Spain, and Poland led. In 2026 so far, Japan and emerging Asia have been strong while India has lagged. A broad global fund avoids having to guess.

How much of my portfolio should be in international stocks? 

It depends on your goals, timeline, and what you already own. The "80/20" rule in US guides is designed for American investors. Because Kenya's market is much smaller, Kenyan investors may want global stocks to make up a meaningful part of their long-term portfolio. A licensed adviser can help you set the right mix.

How can I invest in international stocks from Kenya? 

Through a CMA-licensed platform such as Ndovu, which offers global ETFs and fractional US shares from USD 50, or through a stockbroker for NSE-listed global ETFs.

Sources

• Schwab: 2026: International Stocks Seem Set to Shine (Dec 19, 2025)

• Schwab: Global Equities Mid-Year Outlook 2026 (June 8, 2026)

• CNN via KTVZ: US stocks had a remarkable 2025, but international markets did much better (Jan 4, 2026)

• Madison Partners: September 2026 Market Update

• Chase: International Stock Market Performance So Far in 2026 (Aug 11, 2026)

• investingLive: JPMorgan says non-US stocks at 25% discount (June 25, 2026)

• FactSet Earnings Insight (Sept 25, 2026)

• Vanguard: 10-year return forecasts (as of June 30, 2026)

• US News via WTOP: 7 Best International Stock Funds to Buy for 2026

• StockAnalysis: ACWX holdings (Aug 20, 2026)

• Khusoko: Satrix to list MSCI World Feeder ETF on NSE

• Ndovu pages: ETFs, Shares, Kibaba Special Fund, Pricing

• MSCI: ACWI Index factsheet (as of Sept 30, 2026)

• First Trust: Market Minute, October 2026 (S&P 500 forward P/E as of Sept 30, 2026)