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(Bloomberg) — Check a ranking of the best-performing equity indexes this year and the US doesn’t crack the Top 10. You won’t find it in the Top 25, either. Double that, and the S&P 500 is still absent.

The tally needs to unfurl all the way to 66 before the world’s most valuable equity index shows up — leaving it way behind Greece’s Athex and even Israel’s TA-35. It’s one of the worst relative performances since the global financial crisis for the US benchmark.

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The underperformance is even more surprising given the S&P 500’s  rally to countless records in 2025. But it’s still trailing most developed market benchmarks like Germany’s DAX and Japan’s Nikkei 225, and lags behind gauges in South Korea, Spain and Ghana, when measured in dollars.

That last qualifier is critical, though not determinant. The US currency has fallen  this year, helping to boost returns on foreign bourses in dollar terms. That’s certainly the thrust behind gains of at least 39% in Colombia and Morocco.

But even in local-currency rankings, the S&P 500 comes in just 57th, hardly befitting of a measure home to the six most valuable companies in the world, along with the likes of Coca-Cola Co., McDonald’s Corp. and Walt Disney Co.

The underperformance, market participants say, owes just as much to a broader shift in the mindset among foreign investors, who have started targeting domestic champions as President Donald Trump wages a global trade war. Tensions ramped up on Friday after the president renewed threats of tariffs on China. Even in the US, they’re being more selective, with a focus on big tech rather than broad-based indexes.

Added to that is a growing sense of concern about political and fiscal stability in the world’s largest economy. Trump’s tax and spending bill is projected to blow out the deficit. The government has been shut down since the start of October, the president is increasingly threatening the central bank’s independence and public investment decisions have become less policy-based.

Together, the moves have shaken confidence in America, weakened the dollar and helped stoke a torrid rally in gold. While long-term Treasury yields haven’t exploded in any similar fashion, they’ve been elevated relative to recent years.

“The deteriorating US fiscal situation and increasing policy uncertainty are eroding investor confidence in the US market, weakening the dollar, and prompting investors to explore opportunities in non-US markets,” said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia.

Of course, strategists have for years been predicting an imminent rotation away from US equities and those calls have fallen flat. The dollar’s slide has eased in recent weeks as political stresses mount around the world, from France to Japan to Argentina.

And while the S&P 500 is lagging well behind the top three — Ghana, Zambia and Greece with gains of at least 61% — its  rally this year has created about $6 trillion in market value, equivalent to more than a third of the entire capitalization of the Stoxx 600.

The US is also coming off of back-to-back years with gains north of 20%, easily outstripping the likes of the Euro Stoxx 50 and Nikkei 225. If you take stock of performances since the end of 2022 to 2024, the S&P 500 ranked 10th.

Lasting Outperformance

Still, there are evident reasons that global equity markets may continue to outperform. European interest rates are half the level in the US, giving corporates access to cheaper financing. Companies trade at valuations about 35% lower than in America.

And so in Germany, Rheinmetall AG has more than tripled to lead the DAX to a  gain as the government promises to step up defense spending. European banks, long laggards, have been revitalized. In Spain, Banco Santander SA has almost doubled in value.

South Korea’s Kospi index has risen  this year as investors speculate the new president’s push for shareholder-friendly policies will boost returns. The nation’s standing as a sophisticated chipmaker has given it domestic champions in artificial intelligence, with Samsung Electronics Co. and SK Hynix Inc. rising after deals to supply chips to OpenAI.

“Asia has been a great platform to bring diversification in our portfolio, and to express our preference for looking for alpha within asset classes,” said Sophie Huynh, portfolio manager and strategist at BNP Paribas Asset Management.

Similarly in Japan, expectations for a pro-stimulus lawmaker to become the next prime minister have pushed stocks to all-time highs. SoftBank Group Corp.’s  surge has powered the Nikkei 225. Defense equipment makers Mitsubishi Heavy Industries Ltd. and Japan Steel Works Ltd. also rallied this month on optimism around more government spending.

Global money managers are returning to China after years of aversion, drawn by advances in high-tech industries. Alibaba Group Holding Ltd.’s plans to ramp up AI spending, and Huawei Technologies Co.’s aim to challenge Nvidia Corp. helped Chinese stocks log their best run of monthly gains since 2018. The Hang Seng Tech Index’s year-to-date advance of  is more than double that of the Nasdaq 100.

Too Expensive

The S&P 500’s stellar run from its April low has stretched valuations to levels that have raised alarm and prompted investors to diversify exposure. The index trades at 22 times forward earnings, a premium of 46% to the rest of the world. It’s also famously top-heavy, with mega-cap tech and its smaller brethren accounting for more than one-third of the index by weighting. A 53% rally in the two years starting at the end of 2022 had left foreign investors over-exposed to American equities.

“Investors should be rebalancing, taking profits from their US allocation and increasing exposure to Europe, Asia and emerging markets,” said Kristina Hooper, chief market strategist at Man Group, the world’s largest publicly traded hedge fund. “The US will continue to lag other markets.”

For now, buying from foreign investors remains on pace for a record, as fears of a recession recede. Their purchases make sense given the US is home to the key players in the AI frenzy, led by Nvidia.

But many are moving money, according to a Bank of America Corp. survey of fund managers. Global investors were a net 14% underweight US stocks in September, while being 15% overweight euro-zone peers and 27% overweight emerging markets. There’s also evidence foreigners are being more selective, and why not? Just six stocks account for over 50% of the S&P 500’s gain this year. In fact, a gauge that strips out market-cap biases is up just  this year.

“The last two years have only been about the US and nothing else because tech earnings were surging while everything else was down to flat,” said Beata Manthey, head of European and global equity strategy at Citigroup Inc. “This year, the growth differential between the AI trade and the rest of the world has narrowed, and it’s going to narrow even more next year. So there are more themes to choose from.”

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Motion 035: Protection of Mesopelagic Ecosystem Integrity goes to vote at the World Conservation Congress this October. It urges nations not to authorize commercial fishing or other harmful activities in the deep ocean until we understand it better. If passed, this motion would be a crucial step toward ensuring that life in the deep layers of the ocean continues to thrive, and human activity in this space proceeds only when proven to pose no harm.

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By Silvie Alexander, Kristin Kleisner, Dr. Lance Morgan, Chris Dorsett and Kristina Gjerde.

Beneath the waves, between 200 and 1,000 meters deep, lies one of Earth’s most mysterious and vital ecosystems: the mesopelagic zone, also known as the Ocean Twilight Zone. Though shrouded in darkness, this vast layer spans the globe and harbors an estimated 90% of all fish biomass, making it the largest unexploited ecosystem on the planet.

Until recently, this deep sea zone remained largely unknown. But as scientific discovery begins shedding light on the mesopelagic’s immense ecological and climate value, a new threat is rising: industrial exploitation. 

Fishing fleets are eyeing this zone for extraction as demand for fishmeal and fish oil increases. Other potential activities like deep-sea mining and marine carbon dioxide removal technologies also threaten the integrity of the mesopelagic ecosystem and its services. 

If we are serious about fighting climate change and preserving ocean health, the world must act now to protect this fragile, extraordinary ecosystem before it is too late. An upcoming vote at the International Union for the Conservation of Nature (IUCN) Conservation Congress is the first step. 

Lungs of the Ocean

Though invisible from the surface, the mesopelagic zone isn’t lifeless. It is teeming with bioluminescent fish, jellyfish, and otherworldly creatures, many of which remain unnamed, unstudied, or entirely undiscovered. But what makes this region truly exceptional is the essential role it plays in regulating our climate.

Each night, billions of mesopelagic organisms perform the largest animal migration on Earth: migrating to the surface to feed on carbon-rich plankton, then returning to the depths by day. This nightly movement pulls massive amounts of carbon from surface waters to the deep ocean, where it can be sequestered for hundreds to thousands of years.

It is estimated that mesopelagic species help transport 2-6 gigatons of carbon every year, more than double the annual emissions from all the world’s cars. And that is a conservative range based on our limited knowledge of the region’s biomass. Some scientists estimate migrating mesopelagic organisms facilitate the sequestration of over half the carbon stored by the ocean’s biologic carbon pump, with others positing they are responsible for up to 90% of deep ocean carbon storage. 

As science deepens its understanding of the mesopelagic zone and its species, it is increasingly evident that it is one of the planet’s most powerful climate stabilizers. Without it, Earth could be significantly hotter and climate impacts far more extreme. 

In addition to carbon transport, mesopelagic organisms form the foundation of oceanic food webs, serving as vital prey for economically and culturally significant species such as tuna, swordfish, sharks, sperm whales, and sea lions. In other words, what happens in the mesopelagic zone ripples out across entire ocean ecosystems and affects the communities and industries that depend on them.

Moreover, it is clear a vast number of species have evolved to the unique attributes of this dynamic deep sea environment, yet scientists have only catalogued a fraction. Considering the contributions biodiversity makes to science and life saving medicines every year, this is an invaluable benefit that we cannot afford to lose.

A New Gold Rush in the Deep Sea

Despite its societal, ecological, and climate value, the mesopelagic zone is now in the crosshairs of industrial-scale exploitation. Fishing companies are exploring it as a new source of fishmeal and fish oil (FMFO), used in aquaculture, livestock, and even pet food.

Currently, about 30% of global wild-caught fish are ground into FMFO. But as fisheries falter under climate stress and overfishing, attention is shifting to deeper, more abundant mesopelagic species. For industry, it is a business opportunity. For the planet, it is a dangerous gamble. 

We Have More to Learn – And We Must Learn Fast

It is worth emphasizing that we know shockingly little about the mesopelagic zone. We do not know how many species live there, how long they live, how they reproduce, or how resilient they are to disturbance. We do not know how fast these ecosystems recover from disruption, or if they can recover at all.

Unlike more familiar fisheries, there is no baseline data, no harvest limits, and no management frameworks. It is, quite literally, a scientific black box. While there may be some level of extraction that is sustainable, we do not know what these levels may be or how economic gains weigh against the damage exploitation could cause. There is research underway exploring this, but we need more before we alter this system. 

Ultimately, we cannot manage what we do not measure. Fishing before we have the necessary knowledge in hand is a reckless gamble we simply cannot afford. The stakes for ocean health, biodiversity, and the global climate are too high.

A Global Call to Action 

Recognizing this threat, the Marine Conservation Institute, the Environmental Defense Fund, and Ocean Conservancy are working to pass a motion at the International Union for Conservation of Nature (IUCN) that would place a precautionary pause on mesopelagic exploitation and spur the research needed to answer key questions.

Motion 035: Protection of Mesopelagic Ecosystem Integrity, goes to vote at the World Conservation Congress this October. It urges nations not to authorize commercial fishing or other harmful activities in the mesopelagic until we understand it better. If passed, this motion would be a crucial step toward ensuring the mesopelagic zone continues to thrive, and human activity in this space proceeds only when proven to pose no harm.

This is not about halting all human activity in the ocean – it is about acting responsibly, and understanding that the ocean, and particularly the mesopelagic zone, is more than a resource; it is a life-support system for us and our planet.

The mesopelagic zone is one of Earth’s last truly untouched frontiers. Once lost, we do not know what will happen and we have no guarantee we can restore it.

We have a narrow window of opportunity to make the right choice. The mesopelagic zone has served us and our planet silently for millennia. Now it is time we speak up for it.

What You Can Do

If you are an ocean advocate:

• Share the importance of Motion 035 and the mesopelagic zone.
• Amplify on social media and to your networks.
• Encourage IUCN members to vote “Yes.”

If you are an IUCN Member:

• Read, comment on, and vote in support of the motion.
• Urge others to protect this extraordinary and essential ecosystem.

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About the authors: Silvie Alexander (Blue Carbon Intern at Environmental Defense Fund), Kristin Kleisner (Lead Senior Scientist and AVP, Ocean Science at Environmental Defense Fund), Dr. Lance Morgan (marine biologist and president of Marine Conservation Institute), Chris Dorsett (Vice President, Conservation, Ocean Conservancy) and Kristina Gjerde (Senior High Seas Advisor to IUCN’s Global Marine and Polar Programme).

Featured image: Paul Caiger, Nancy Copley, Larry Madin/Woods Hole Oceanographic Institution.