ISMD units floated on the ASX back on Wednesday, 22 July. Since then, they have fared fairly well. The ETF first traded at just over $50.20 a unit. Today, they have climbed to about $50.63 at the time of writing.

But let's dive into exactly what you are buying if you purchase this latest ETF offering on the ASX.

ISMD: An introduction to the new ETF kid on the ASX block

So, as its name implies, this latest ETF from Global X aims to offer ASX investors exposure to a portfolio of small-cap and mid-cap shares. No massive companies like Apple, Amazon or NVIDIA here. This is a relatively under-serviced opportunity for Australian investors, with only a handful of ETFs currently covering these corners of the global market.

As such, this ASX ETF may suit investors looking to diversify into international shares, but who also may be concerned about the heavy exposure that traditional index funds that track stocks outside the ASX have towards the largest companies in the world.

ISMD is an index fund, tracking the MSCI World ex Australia SMID Cap Select Index. This index holds around 300 international stocks, sourced from advanced economies around the world. As with most globally-focused index funds, ISMD is weighted heavily towards the United States, with about 65% of the ETF's portfolio made up of US stocks. Other contributors include Japan, the United Kingdom, Switzerland, and Italy. On the smaller end, Hong Kong, Singapore, Israel, and Bermuda also contribute to this fund.

In terms of individual holdings, you still might recognise some of this ASX ETF's largest stocks. They include SanDisk Corp, Warner Bros Discovery, eBay, Archer-Daniels-Midland, Ralph Lauren, and KFC-owner Yum! Brands.

The fund is not currency hedged. That means that the value of ISMD units can be affected by both the underlying movements of its stock holdings, and movements on the foreign exchange markets. This can cut both ways for investors, of course.

The Global X MSCI International Small and Mid Cap ETF charges a management fee of 0.45% per annum. That's a cost of $45 per year for every $10,000 invested.

The post Say hello to the ASX's newest ETF appeared first on The Motley Fool Australia.

The S&P 500 Index (SP: INX) soared 16.39% and delivered total returns, including dividends, of 17.88%, according to S&P Global.

The S&P 500 reached a record 6,945.77 points in December before closing the year at 6,845.5 points.

The Nasdaq Composite Index (NASDAQ: .IXIC) did even better, rising 20.36% with total returns of 21.33%.

The Nasdaq Composite hit its peak in October at 24,019.99 points before closing at 23,241.99 points on 31 December.

The Dow Jones Industrial Average Index (DJX: .DJI), which tracks the performance of 30 selected S&P 500 stocks, rose 12.97% and delivered total returns of 14.92%.

The Dow Jones Index closed 2025 at 48,063.29 points, and hit a new record overnight at 49,209.95 points.

By comparison, S&P/ASX 200 Index (ASX: XJO) shares rose 6.8% and produced total returns of 10.32% in 2025.

The ASX 200 rose to a record 9,115.2 points in October before finishing the year at 8,714.3 points.

The S&P/ASX All Ords Index (ASX: XAO), which tracks the top 500 companies, rose by 7.11% and gave a total return of 10.56%.

The ASX All Ords closed 2025 at 9,018.8 points after hitting a record in October at 9,414.6 points.

Top 5 US stocks and ASX shares of 2025

According to Yahoo Finance, the top five US stocks for growth last year were:

1. Flash memory designer and manufacturer Sandisk Corp (NASDAQ: SNDK), up 548%

2. Data storage company and hardware manufacturer, Western Digital Corp (NASDAQ: WDC), up 335%

3. Computer data storage company, Micron Technology Inc (NASDAQ: MU), up 222%

4. Global data storage solutions company, Seagate Technology Holdings PLC (NASDAQ: STX), up 220%

5. US stocks trading platform provider, Robinhood Markets, Inc. (NASDAQ: HOOD), up 183%

The top five ASX All Ords shares for growth were:

1. Anti-drone technology company DroneShield Ltd (ASX: DRO), up 300%

2. Gold miner Pantoro Gold Ltd (ASX: PNR), up 220%

3. Gold explorer Predictive Discovery Ltd (ASX: PDI), up 220%

4. Gold miner Resolute Mining Ltd (ASX: RSG), up 206%

5. Lithium miner Core Lithium Ltd (ASX: CXO), up 206%

Check out the best performing ASX 200 shares here.

What's next for US stocks in 2026?

In its 2026 investment outlook, Morgan Stanley projected that S&P 500 shares will rise to 7,800 points by the end of the new year.

That would represent an annual gain of 13%.

The broker expects US earnings and cash flow growth due to a market-friendly policy mix, interest rate cuts, corporate tax cuts from the 'One Big Beautiful Act', positive operating leverage, and the re-emergence of pricing power and AI-driven efficiency gains.

Serena Tang, Morgan Stanley's Chief Global Cross-Asset Strategist, said:

There will be some bumps along the way, but we believe that the bull market is intact.

Another broker, UBS, predicts the S&P 500 will lift to 7,300 points by June and 7,700 points by Christmas.

UBS said US stocks will be driven by about 10% earnings growth and lower interest rates.

In an article, the broker said: 

In addition to the transformative force of AI, we believe the structural trends of electrification and longevity will also drive equity performance for the long term.

Tactically, we believe AI beneficiaries are broadening out both within and beyond tech, and we see opportunities in companies facilitating grid modernization and supply critical raw materials.

In the longevity field, we expect strong growth in the obesity, oncology, and medical device markets.

Check out which US stocks are most popular with Aussie investors and why.

The post US stocks vs. ASX shares in 2025 appeared first on The Motley Fool Australia.