Several years ago, we explained why we think investors should consider allocating to non-U.S. equities. The crux of our argument was threefold.
First, we find that more companies that deliver strong, sustainable value creation are found outside the United States. Sustainable value creation is our proprietary measure of strong corporate performance.
Second, expectations for earnings growth and returns on invested capital had become more favorable outside the U.S., and our outlook for growth in key industries suggested accelerating demand and emerging business models abroad.
Third, the regulatory environment outside the U.S. is more conducive to the proliferation of disruptive business models.
While each of these pillars remains relevant arguments as to why investors should allocate to non-U.S. equities, new forces are emerging that underpin the timeliness of international investing at this moment.
Given new dynamics facing global equity investors, we have refreshed our work. In our latest piece on this topic entitles, “Non-U.S. Investing in a Fragmenting World,” we revisit our thinking on why investors should include non-U.S. equities in their asset allocations. But we extend that dialogue to capture why we think now is a particularly advantageous time for investors to lean into non-U.S. equities.
In short, we believe a confluence of tailwinds is building for non-U.S. equity investors. Chief among them, the narrowing growth differential between U.S. and international markets. Tariffs, shifting policy regimes, and broader macroeconomic realignments are compressing the growth gap and setting the stage for non-U.S. equities to reassert their relevance in global portfolios.
Filmed June 2025
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