U.S. stocks, led by mega-cap technology firms, aggressive monetary stimulus, and a 16-year secular bull run in the Dollar, have outperformed non-U.S. counterparts in 13 of the 17 calendar years since 2008. However, the decade leading up to 2008 saw international and emerging market equities leading the way. After this unprecedented stretch of U.S. dominance, there are signs that the wheel is turning yet again.
Profound shifts in policy, valuations, and global economic drivers are signaling a market rotation is underway. From Europe to Japan, corporations look poised to benefit from improved domestic growth and global secular opportunities, and international equities are ascending as a surprising safe haven amidst market volatility. U.S.-centric investors risk missing the opportunity to capitalize on these shifts and take advantage of what international equity investing offers, namely, selective exposure to high-quality, resilient companies with long-term return potential that can unlock diversification benefits.
MSCI EAFE P/E NTM relative to S&P 500
Source: Factset
This report details Boston Common’s perspective on why an international equity allocation deserves a fresh appraisal and how our sustainable investment approach helps identify companies well-positioned to lead in this evolving global landscape.
This piece is intended as an editorial review of a survey of risk considerations and does not constitute investment advice, a solicitation, or an offer to buy or sell any security. Past performance does not guarantee future results. All investments involve risk, including the risk of loss of principal.
References to third-party research, publications, and data sources are provided for informational purposes only. Boston Common Asset Management does not warrant the accuracy or completeness of third-party information cited herein. Readers should consult original sources and qualified professional advisors before making any investment decision.
