Episode summary
ETF State of the Union with Fidelity’s Craig Ebeling
ETF Prime
· · Hosts: Nate Geraci, Simeon Hyman · Guests: Craig Ebeling, Roxanna Islam
Summary
International equity ETFs are drawing record inflows as investors respond to a weaker U.S. dollar, cheaper valuations, and better earnings trends abroad. The analyst said international equity ETFs took in about $220 billion in 2025 and another $75 billion year to date, with emerging markets especially strong. He tied the shift to U.S. market concentration, tech weakness, Europe’s defense and infrastructure spending, and Asia’s AI-linked growth, while noting international stocks still trade at lower forward P/E multiples than U.S. equities. He also argued that product structure matters, highlighting that some emerging market ETFs exclude China or tilt toward South Korea, Taiwan, and other “democracy tilted” markets.
Key takeaways
- International equity ETFs drew about $220 billion in 2025 and roughly $75 billion year to date, according to the analyst.
- Emerging market ETFs have been the standout subset, with some products ranking near the top of the entire ETF universe for inflows.
- The analyst said international valuations remain cheaper than U.S. stocks, with broad international around 18 times forward earnings versus 22 times for the U.S.
- The host and analyst both stressed that investors should look under the hood, because ETFs with similar labels can have very different country exposures and risks.
- Craig Ebeling said active ETFs accounted for 36% of 2025 ETF flows and 47% of advisor-channel flows, showing faster adoption among financial advisers.
Notable quotes
“People are looking to diversify beyond the US”
“We're in a very concentrated US equity market. So, I think that's part of it”
“The biggest difference was in the overall market about 20% of flows were going to ETFs that had an expense ratio of 60 basis points or more”
How the episode opens
You know, when there's weakness in the tech sector, it really hits the US market. We're in a very concentrated US equity market. So, I think that's part of it.
People are looking to diversify beyond the US. All right, joining me will be Craig Evelyn, head of ETF strategist at Fidelity Investments, who of course is a top 10 ETF issuer, currently 75 ETFs, about $150 billion in assets. And Craig sits in a very interesting role because he works with Fidelity's portfolio management team, uh, their product development team, and their distribution team to help educate Fidelity clients on ETFs.
And so that obviously places him in the perfect spot to observe and analyze key ETF trends. And that's exactly what we're going to discuss this week. Uh, I'm calling this sort of an ETF State of the Union because Craig is going to highlight some of these key trends and themes that he is seeing right now and offer a few thoughts on where he thinks things might be heading as well.
And I'll tell you, he has some data regarding financial advisor ETF usage that I'm really interested in hearing more about because we know how big of a driver financial advisors are in dictating ETF flows and trends. And so we'll get into that as well. This should be a great conversation again with somebody who knows the ETF space inside and out.
Now, to start this week, I'll be joined by Roxanna Islam, head of sector and industry research at Vetify. And speaking of key ETF trends and themes, a very big one right now, which I'm sure I'll touch on with Craig as well, is the growing interest around international equity ETFs. Uh, this category actually just took in record inflows in January.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- etf state of the union
- international equity etf inflows
- sector and industry research
- etf performance drivers
- standout international etf funds
Companies and tickers mentioned
- Fidelity Investments
- VettaFi
Watch the episode
Watch “ETF State of the Union with Fidelity’s Craig Ebeling” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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ETF Prime, this episode and its artwork belong to Nate Geraci. Octagon is not affiliated with the show; this page is an independent summary.
