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

By Matthew Benjamin – Mar 6, 2026 at 8:30AM ESTKey PointsInvestors have been diversifying away from U.S. stocks for months.REITs look more attractive as interest rates look like they'll go lower.The rotation out of mega tech stocks like the "Magnificent Seven" and into other asset classes continued apace in February. Let's see who did best -- and whether that can continue. The best performing asset class during the month was developed economy stocks excluding the U.S., as measured by the Vanguard FTSE Developed Markets Index Fund ETF (VEA 1.22%). It climbed 6.1% in February and is up about 7.5% for the year. ExpandNYSEMKT: VEAVanguard FTSE Developed Markets ETFToday's Change(-1.22%) $-0.80Current Price$64.99Key Data PointsDay's Range$64.41 - $65.2352wk Range$45.14 - $70.55Volume596K Gold rose 8.7% during the month, but that's a single commodity, not an asset class. Real estate investment trusts, both foreign and domestic, also did well in February. Foreign REITs were up 5.8% for the month, while U.S. REITs rose 5.4%. For comparison, the S&P 500 index was down 0.9% during February and is down about 0.7% for the year after taking a nosedive in recent days due to market jitters about the ongoing war in the Middle East. That index is weighted, so companies with the largest market caps, basically the Magnificent Seven, can move it more than others. Meanwhile, the Nasdaq-100 index was down 2.3% during the month. The largest holdings in that index are the Magnificent Seven stocks. Global investors have been diversifying away from U.S. equities The VEA ETF holds a diversified mix of large-, mid-, and small-cap stocks from advanced economies around the world. About half the index is comprised of European companies, and more than a third from Pacific nations. Canada and the Middle East make up the remainder. Stocks from those nations have done well relative to U.S. stocks in recent months because of healthy economic growth and government fiscal stimulus over the past year, as well as a growing preference among global investors for non-U.S. stocks due to tariffs and other U.S. policies implemented in 2025 and 2026. High valuations of U.S. stocks -- which make them expensive relative to earnings -- also played a part, as investors began to look for better values in other developed markets. Image source: Getty Images. As for REITs, they tend to rise at the prospect of lower interest rates, as they rely heavily on debt to finance properties. And futures markets have indicated the possibility of lower-than-expected interest rates by the end of this year. Both of those trends -- falling interest rates and diversification away from U.S. stocks -- look very likely to continue over the next few months, so international stocks and REITs could well continue to outperform other asset classes. Gold and crude oil may also outperform, as gold is a hedge in uncertain times (like during wars), and war in the Middle East always sends crude prices higher. Investors wishing to gain exposure to some of these asset classes might consider Vanguard's developed market ETF, mentioned above, the Vanguard Global ex-U.S.

Real Estate Index Fund ETF (VNQI 0.86%), and the Vanguard Real Estate Index Fund ETF (VNQ 1.29%). By the way, the price of Bitcoin plummeted nearly 22% during the month of February. That asset has dropped by almost 45% since hitting an all-time high of $124,310 per token back in October of last year.Read NextFeb 23, 2026 •By Katie BrockmanVEA vs. SPDW: Which International ETF Is the Best Choice for Investors?Feb 20, 2026 •By Matthew BenjaminHow Much Cheaper Are International Stocks Than U.S. Stocks?Feb 20, 2026 •By David Dierking3 International Stock Market ETFs to Buy With $2,000 and Hold ForeverFeb 13, 2026 •By Matthew BenjaminDon't Count Them Out Yet: Why International ETFs Could Still Outperform in 2026Jan 24, 2026 •By Sara AppinoVEA vs. ACWX: Cheap International Exposure or Full Global Access? Jan 8, 2026 •By Matthew BenjaminWhich Asset Classes Had the Best 2025?About the AuthorMatthew Benjamin is a contributing Motley Fool stock market and investing analyst covering publicly-traded companies across all sectors. Prior to The Motley Fool, Matt was a senior markets expert at an investing newsletter in Baltimore, an editorial consultant to the World Bank and the International Monetary Fund (IMF), and an economics correspondent at Bloomberg News. He holds a B.A. from Bucknell University and an M.A. from New York University. Fun fact: Matt has met every Federal Reserve Chair from Paul Volcker through Jerome Powell.TMFMbenjamin68Stocks MentionedVanguard FTSE Developed Markets ETFNYSEMKT: VEA$65.02(-1.18%)-$0.77Vanguard Real Estate ETFNYSEMKT: VNQ$93.36(-1.29%)-$1.22Vanguard International Equity Index Funds - Vanguard Global ex-U.S. Real Estate ETFNASDAQ: VNQI$47.37(-0.83%)-$0.40*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.