Classic and Current Rationale Spell Investment Opportunities Overseas
Sources: FactSet, MSCI.com, and Standard & Poor’s. U.S. is the S&P 500 Index, other regions are MSCI indices. All MSCI indices are net USD returns. Past performance does not guarantee future results.
Source: Morgan Stanley, Bloomberg, Thornburg Investment Management. Past performance does not guarantee future results.
World GDP: International Monetary Fund, World Economic Outlook Database, April 2018
U.S. Equity Fund Assets: 2018 Investment Company Fact Book, Investment Company Institute, as of 12/31/2017
The United States represents 24% of global Gross Domestic Product. Despite this growing opportunity set, U.S. investors continue to show home country bias, preferring domestic equities over international stocks by a wide margin.
Source: International Monetary Fund, World Economic Outlook Database, October 2017.
The direction of the global economy favors emerging market advancement over time.
We search the globe for fundamentally sound, undervalued companies, more of which are overseas. Non-U.S. company P/Es are near 10-year lows relative to the U.S. While last year’s returns look great, valuations for international stocks remain quite compelling.
Source: Bloomberg, based on estimated earnings per share.
U.S. companies are reporting peak level earnings; while strong, perhaps there is more room to run internationally, as earnings remain over 25% below the peak.
International Investing: Get Ahead of the Curve
The current and classic rationale for overseas investing are compelling, especially right now!