Equity markets outside the US have launched a notable comeback thus far in 2019, according to new insight from FTSE Russell and Franklin Templeton Investments. A broad collection of developed global markets including Japan, Germany, Switzerland, South Korea, Canada, the UK and Europe notched positive returns in January after a challenging year in 2018, particularly in December. This 2019 trend has also occurred broadly in emerging markets.
Alec Young, managing director, global markets research, FTSE Russell:
“Following Q4’s steep losses, depressed valuations and sentiment readings set the stage for a broad January equity rebound. Gains extended to both developed and emerging markets with markets from the US to Europe and Asia all rallying sharply. Positive catalysts included dovish Fed policy guidance, Q4 earnings that largely exceeded low expectations globally, hopes for easing US-China trade tensions and a soft Brexit.”
“Looking ahead, international equities boast a lower valuation profile than US stocks with the FTSE Europe, FTSE Japan and FTSE Emerging Indexes sporting 12-month forward PE ratios of 12,7X, 11.8X and 11.7X vs, 16X for the Russell 1000® Index. In addition, income-oriented investors should note that foreign stocks also sport a dividend advantage with the FTSE Europe, FTSE Japan and FTSE Emerging Indexes yielding 3.4%, 2.5% and 3.3% vs. only 2% for the US Russell 1000 Index.”
Source: FTSE Russell, Refinitiv as of February 1, 2019.
Patrick O’Connor, head of global ETFs for Franklin Templeton Investments:
“The goal of our collaboration with FTSE Russell is to provide advisors and investors with the ability to access a diversified suite of non-US markets, either through single country or regional exposures.”
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