Global equity markets have enjoyed strong performance since March 23, with a notable surge in the month of July, according to the FTSE Global RIC Capped Indexes.
Global developed equity market standouts in recent months include Korea and Germany, which returned 60.9% and 54.5%, respectively, from March 23 through July 31.
And in July emerging markets equities surged, with standout performances for FTSE Global RIC Capped Indexes measuring Taiwan (+11%), India (+10.6%) and China (+9.5%).
Christopher Vass – senior product manager, FTSE Russell:
“A number of factors, both fundamental and technical, have contributed to strong relative returns for US investors in international developed and emerging equity markets in recent months. In developed markets, Korea has benefited from a large overweight in technology stocks and a low impact from COVID-19 relative to other markets, and Germany has a large exposure to China via exports in the industrials and basic materials sector, making it an indirect play on the China economic recovery. And, in July, US investors in emerging markets have benefitted quite a bit from the sharp fall in the US dollar, with the DXY Dollar Index down 4.2% for the month. A weaker US dollar translates into higher returns in dollar-denominated terms for foreign equities.”
Dina Ting, head of global index portfolio management, Franklin Templeton:
“The pandemic-induced market disruptions have caused both short-term and longer lasting changes to countries. These changes affect countries differently based on a number of factors, including the handling of the pandemic itself, stimulus and trade policy, and the sector make-up of each country. The COVID crisis continues to drive rethinking of supply chains – with greater focus on shorter chains and less globalization, which will likely result in continued wide-dispersion of single country returns. All of these changes have created new opportunities for investors to disaggregate exposure to developed and emerging markets by expressing views in specific countries they feel may be better positioned for the future.”
Vass shares more insights on industry shifts reshaping South Korea in a recent FTSE Russell blog post. Visit the FTSE Russell website for more information on the FTSE Global RIC Capped Indexes.
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