Center For Investment Excellence
Unpacking the opportunity in developed market equities
Nov 21, 2023
Tim Woodhouse, Portfolio Manager in our International Equity Group, joins David Lebovitz to discuss cross-border investing, valuations, sector themes, corporate governance, and more in the context of developed market equities. Key topics include opportunities in Europe and Japan, differences in pricing, globalization, post-COVID rebound in the Japanese economy, challenges in Europe's energy self-sufficiency, and the argument for exposure to Europe despite potential risks.
18:35
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Quick takeaways
- Developed markets outside of the US offer attractive investment opportunities due to valuations and growth potential compared to high-growth companies in the US.
- Europe's sector composition, market stability, and appealing valuations make it an interesting market for investment.
Deep dives
The Macro Case for Developed Markets Outside of the US
Developed markets outside of the US have underperformed the US equity market in the past decade. However, the macro case for these markets lies in valuations and growth potential. Valuations have been impacted by falling rates, but this tailwind is unlikely to continue. Growth, therefore, becomes crucial, especially compared to high-growth companies in the US. Europe's economic situation is challenging, but its shift to more stable sectors and low valuations make it an interesting market. Additionally, the trend of countries trading more with familiar partners benefits European businesses operating in the US. This might be the moment to reconsider international investments.
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