These 2 Asset Classes Had the Best February. Can It Continue?

The rotation retired of mega tech stocks similar the "Magnificent Seven" and into different plus classes continued apace successful February. Let's spot who did champion -- and whether that tin continue.

The champion performing plus people during the period was developed system stocks excluding the U.S., arsenic measured by the Vanguard FTSE Developed Markets Index Fund ETF (NYSEMKT: VEA). It climbed 6.1% successful February and is up astir 7.5% for the year.

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Gold roseate 8.7% during the month, but that's a azygous commodity, not an plus class. Real property concern trusts, some overseas and domestic, besides did good successful February. Foreign REITs were up 5.8% for the month, portion U.S. REITs roseate 5.4%.

For comparison, the S&P 500 scale was down 0.9% during February and is down astir 0.7% for the twelvemonth aft taking a nosedive successful caller days owed to marketplace jitters astir the ongoing warfare successful the Middle East. That scale is weighted, truthful companies with the largest marketplace caps, fundamentally the Magnificent Seven, tin determination it much than others.

Meanwhile, the Nasdaq-100 scale was down 2.3% during the month. The largest holdings successful that scale are the Magnificent Seven stocks.

The VEA ETF holds a diversified premix of large-, mid-, and small-cap stocks from precocious economies astir the world. About fractional the scale is comprised of European companies, and much than a 3rd from Pacific nations. Canada and the Middle East marque up the remainder.

Stocks from those nations person done good comparative to U.S. stocks successful caller months due to the fact that of steadfast economical maturation and authorities fiscal stimulus implicit the past year, arsenic good arsenic a increasing penchant among planetary investors for non-U.S. stocks owed to tariffs and different U.S. policies implemented successful 2025 and 2026.

High valuations of U.S. stocks -- which marque them costly comparative to net -- besides played a part, arsenic investors began to look for amended values successful different developed markets.

As for REITs, they thin to emergence astatine the imaginable of little involvement rates, arsenic they trust heavy connected indebtedness to concern properties. And futures markets person indicated the anticipation of lower-than-expected involvement rates by the extremity of this year.

Both of those trends -- falling involvement rates and diversification distant from U.S. stocks -- look precise apt to proceed implicit the adjacent fewer months, truthful planetary stocks and REITs could good proceed to outperform different plus classes. Gold and crude lipid whitethorn besides outperform, arsenic golden is simply a hedge successful uncertain times (like during wars), and warfare successful the Middle East ever sends crude prices higher.