Nearly half of the world's market capitalization lies outside the U.S.,1 offering access to some of the most innovative companies and promising growth opportunities in the world.
While the U.S. is a huge driver of global growth, its share of global growth has been shrinking. On the other hand, in many developed and emerging economies, the already large and diverse opportunity set has been growing.
Relative U.S. outperformance over the past decade has skewed many strategic allocations between U.S. and international equities. This could introduce unintended portfolio risks.
While equity markets are generally riskier than fixed income markets, they typically offer compensation for that risk. In U.S. markets, investors receive a meaningfully smaller compensation for equity risk (when compared to U.S. Treasuries) than investors in international markets.2
During the past four decades, U.S. and international equities have exchanged periods of dominance. Since 2010, U.S. equities have enjoyed their longest period of outperformance over the past five decades. If history is any guide, that trend seems poised to reverse.
From frontier and emerging markets to overseas technology or real estate, our international equity strategies represent a full spectrum of overseas markets and make it easier for you to construct the diversified and appropriately balanced portfolios that your clients demand.
Our investment professionals are dedicated to uncovering distinctive international opportunities to help your clients achieve long-term portfolio growth while managing risk.
Discover the difference that our strategic investing approach can make for investors seeking to pursue global growth–especially in uncertain market environments.
1As of December 31, 2018, measured by the MSCI All Country World Index.
2As of June 30, 2019. Morningstar Direct. Analysis by T. Rowe Price.
This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial, and tax advice before making any investment decision. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested
Risks: Investing involves risk, including potential loss of principal. Diversification neither assures a profit nor eliminates the risk of experiencing investment losses. Investing internationally entails specific risks, including currency risk, political risk, and geographic risk. These risks are larger for investments in smaller companies and those in emerging markets, as well as specific sectors. Emerging market investments can be riskier than U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as specific country, regional, and economic developments.