We have been advocating for Freedom Investing since 2004. Every year, The Heritage Foundation evaluates all of the world’s countries using their Index of Economic Freedom, where a high score correlates to nearly every positive measure of a country. We then use this ranking and efficient frontier analysis to craft our Foreign Stock investment strategy that we call “Freedom Investing.”

This article is part of my series where I review how Freedom Investing performs for the quarter.

About Return Data

In this analysis, I have used the actual products we are investing in rebalanced monthly to our static asset allocation targets with returns ending June 30, 2025. This analysis does not reflect our dynamic tilt or our individual stock foreign health care strategy, both of which we implement in client portfolios.

In 2024, we recategorized South Korea as a developed market (as FTSE does) rather than as an emerging market (as MSCI does). However, it is worth noting that Columbia EM Core ex-China ETF (XCEM) uses MSCI’s definition and contains some of our South Korea allocation. For the purpose of this reporting, FLKR is counted as Developed and XCEM is counted as emerging.

For comparison, I included the actual products of VEA, VWO, and ACWX. These ETFs represent a simple baseline for the relevant category. The Vanguard FTSE Developed Markets (VEA) can be compared to Developed Freedom Investing, Emerging Market (VWO) can be compared to Emerging Market Freedom Investing, and the All World ex-US (ACWX) can be compared to the Overall Freedom Investing.

I have also included some indexes. These indexes represent theoretical returns of a particular strategy. While they are unburdened by fees, I have selected the Net Return (NR) reporting for the index. The Net Return indicates that Morningstar has approximated the minimum possible dividend reinvestment, after deduction of some tax withholding. For those, MSCI EAFE Equal Country Weighted  NR USD can be compared to Developed Freedom Investing, and MSCI EM Equal Country Weighted NR USD can be compared to Emerging Market Freedom Investing. Note that neither South Korea nor Canada are included in MSCI EAFE.

Lastly, I have also included the performance of the developed countries currently excluded from our Freedom Investing strategy to provide additional context.

Overview

Last quarter, we saw that in 1-year returns ending March 31, 2025, Developed Freedom Investing had a +1.27% advantage, Emerging Market Freedom Investing had a -9.45% disadvantage, and Overall Freedom Investing had a -2.01% disadvantage.

This quarter, we saw that in 1-year returns ending June 30, 2025, Developed Freedom Investing had a -0.91% disadvantage, Emerging Market Freedom Investing had a -3.66% disadvantage, and Overall Freedom Investing had a -1.69% disadvantage.

In 1-year returns ending June 30, 2025, Emerging Markets outperformed Emerging Markets ex-China by 6.51%.

You can find our articles reviewing the performance of Freedom Investing here.

	Ticker	3-Month	6-Month	9-Month	1-Year
MSCI EAFE Equal Country Weighted NR USD	—	13.83%	22.51%	12.37%	22.08%
Vanguard FTSE Developed Markets ETF (Market Return)	VEA	13.06%	20.73%	10.96%	18.90%
Developed Freedom Investing		13.86%	23.20%	10.98%	17.99%
Austria	EWO	20.49%	44.34%	36.27%	42.34%
Denmark	EDEN	11.01%	8.39%	-8.94%	-8.03%
Finland	EFNL	15.06%	30.66%	13.13%	22.14%
Germany	FLGR	16.21%	36.17%	27.82%	41.78%
Ireland	EIRL	15.60%	16.36%	0.76%	7.33%
Netherlands	EWN	18.18%	24.13%	9.53%	10.90%
New Zealand	ENZL	9.42%	1.91%	-5.58%	2.63%
Norway	ENOR	10.17%	27.24%	18.76%	19.32%
Singapore	EWS	11.31%	21.04%	22.51%	41.34%
Sweden	EWD	11.14%	25.29%	7.74%	16.20%
Switzerland	FLSW	8.59%	21.44%	7.68%	16.73%
South Korea	FLKR	33.64%	40.78%	15.97%	12.42%
	Ticker	3-Month	6-Month	9-Month	1-Year
MSCI EM Equal Country Weighted NR USD	—	12.23%	20.62%	12.27%	21.33%
Emerging Markets Freedom Investing		13.67%	15.34%	7.85%	12.88%
Emerging Markets	VWO	9.60%	12.75%	6.26%	16.54%
Emerging Markets ex-China	XCEM	15.73%	15.47%	7.50%	10.03%
Taiwan	FLTW	20.90%	10.47%	9.95%	9.02%
Chile	ECH	7.75%	28.31%	18.17%	24.61%
Mexico	FLMX	21.32%	32.04%	16.44%	10.38%
	Ticker	3-Month	6-Month	9-Month	1-Year
Overall Freedom Investing		13.82%	20.50%	9.98%	16.30%
iShares MSCI ACWI ex US ETF (Market Return)	ACWX	11.45%	18.48%	9.56%	17.99%
Other Developed Countries Not In Freedom Investing	Ticker	3-Month	6-Month	9-Month	1-Year
Australia	FLAU	13.84%	12.27%	0.05%	11.50%
Belgium	EWK	13.19%	22.04%	8.22%	22.63%
Canada	FLCA	13.20%	15.10%	13.59%	27.70%
France	EWQ	9.97%	21.98%	9.15%	16.72%
Hong Kong	FLHK	8.33%	13.09%	3.90%	23.52%
Israel	EIS	28.32%	23.84%	42.32%	58.28%
Italy	EWI	15.73%	36.16%	27.64%	38.71%
Japan	FLJP	10.26%	13.30%	7.61%	13.82%
Portugal	MSCI Benchmark	23.04%	32.57%	7.96%	18.15%
Spain	EWP	16.97%	43.38%	29.43%	46.26%
United Kingdom	FLGB	8.97%	19.25%	11.58%	21.17%

 

For more information about Freedom Investing, you may enjoy reading “A 25-Year Review of Freedom Investing” or “Risk-Return Analysis of Freedom Investing.”

Photo of South Korea by kim giseok on Unsplash. Image has been cropped. Returns data gathered from Morningstar Advisor Workstation.