Latest news with #MSCIACWI
Yahoo
a day ago
- Business
- Yahoo
Worried about market volatility? Be sure to stay diversified.
President Trump's tariff moves have some investors on edge. That's why Envestnet Solutions co-chief investment officer & group president Dana D'Auria advises her clients to stay diversified, calling it the "antidote to uncertainty." Hear more from D'Auria in the video above. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Now, tariffs are back in the news, which by the way, I don't think was a big surprise, right? It was a 90-day pause. It's not surprising at all that, you know, some of the rhetoric is coming back into this because they've really, they they've got less than a handful of, uh, actual agreements made during those 90 days. So none of this is is incredibly surprising, but it does inject a lot of uncertainty and diversification really is kind of the antidote to uncertainty in investment markets. So where do you think, um, the best place to look for that diversification is right now? Yeah, I mean, a lot of portfolios, I mean, we're, you know, we we oversee obviously, uh, big portfolios that, um, retail investors, right? So retirement type portfolios, uh, what people are living on and and expecting to live on in their old age. And um, you know, the the 6040 remains kind of a standard bearer, but in the last, you know, several years because of just the predominance of US markets, you've seen a lot of, you know, large cap push into large cap questioning around, do I need something other than the S&P 500? Do I need to be in small cap stocks? You know, is there a good argument for international diversification? And we do, we think there definitely is, right? I mean, at the end of the day, the market is pricing what the value of those future cash flows is from all of those different sectors. So having international positions including emerging markets positions, we think pays off in the long run. And as a starting point, even if you're just looking at, you know, what is the weight in the overall market? What does the MSCI ACWI have as a weight to these places? If nothing else, that's a that's a nice starting point. Small caps as well, I mentioned them before, uh, there is, you know, they've struggled for sure. Uh, there's a profitability issue in the US. However, if you look internationally, small caps have, you know, stood up a lot better. There's less of a profitability issue and there's also a lot more easing going on internationally. So those companies have done better this year. Again, a sign of why you want to be kind of diversified in these different parts of the market.
Mint
2 days ago
- Business
- Mint
With ₹3.4 trillion already in, are DIIs the new market movers from here on?
Even as foreign investors have turned cautious, domestic institutional investors (DIIs) have emerged as the engines of India's 2025 stock market rally—pumping in record inflows and offering a resilient counterweight to global volatility. DIIs infused ₹3.44 trillion into Indian equities between January and June 2025—the highest ever for this period since 2017, NSDL and BSE data showed. One of the biggest shifts in the market is how more Indian households are steadily investing through systematic investment plans (SIPs). It is a real change in how people think about saving, putting small amounts regularly into the stock market and becoming part-owners of strong Indian companies. This is not quick, speculative money; it is long-term and consistent, explained Jiten Doshi, co-founder and chief investment officer, Enam AMC. According to Doshi, India's economic resilience—GDP growth over 7%, stable inflation, robust corporate earnings—and liquidity driven by RBI rate cuts are making equities the go-to vehicle for long-term wealth creation. 'The market rally is a function of three core forces: the earnings trajectory, the participation structure, and liquidity," says Doshi. Also read: Retail derivatives traders continue to bleed, finds Sebi Volatility down, but valuations stretched So far in 2025, the Nifty 50 has gained more than 7% but it has been anything but a smooth ride, with wild swings of volatility along the way. India's Volatility Index (VIX), also known as fear gauge, declined from a high of 22.79 on 7 April, the month when Trump first announced reciprocal tariffs, to over 12 level on Monday. "Time and price corrections have played out across many sectors and stocks," says Jay Kothari, Global Head of International Business at DSP Asset Managers. That said, he feels a few names still look stretched on valuations, so it continues to be a stock picker's market. Domestic inflows will not only remain resilient but also continue to outpace foreign investments in 2025 and beyond, largely driven by the "home-country bias" of Indian investors even as they will look for diversification globally in themes not available on Indian shores, he believes. Even as investors diversify their portfolios, rising geopolitical tensions—from the Middle East to India-Pakistan, and the ongoing US-China tariff standoff—are pushing many to lean more heavily toward their home markets. 'There's a clear shift toward relative safety and familiarity of India will help in attracting foreign flows," noted Kothari. India may be attracting steady interest, but it's not the only option for global investors. Some Asian markets like Taiwan and South Korea are also competing for foreign inflows, said Kothari. Meanwhile, Japan, the US, and Europe remain core allocations in most portfolios, especially as many investors benchmark against the MSCI ACWI. The MSCI ACWI (All Country World Index) tracks large and mid-cap stocks across 23 developed and 24 emerging markets, covering about 85% of the global investable equity universe with 2,528 constituents. Also read: India's share in global market cap up from recent low—but risks remain Will homegrown flows keep outrunning foreign capital? DII ownership has been steadily climbing. By the end of March 2025, domestic institutions held 17.4% of total shares in Nifty 200, highest since the low of 13.3% back in June 2021, according to Prime Database. Meanwhile, FII ownership slipped to 17.35% by March end 2025, their lowest since the 16.9% recorded as of September end of 2020. Foreign flows are often seen through a 'push and pull' lens, either drawn in by compelling opportunities within emerging markets or redirected from developed markets due to weaker prospects there, notes a June report by GMO. Even as near-term inflows into Indian equities remain strong on the back of steady DII support, foreign investors haven't been negative on India either, noted Nimesh Chandan, CIO at Bajaj Finserv AMC. In fact, he thinks foreign interest in Indian equities is only picking up, though a few pullbacks here and there are just part of the game, he adds. 'Not only do we see foreign participation in the secondary market, but also strong demand in initial public offers (IPOs) and qualified institutional placements (QIPs)." Looking at the past two months, foreign investors have shown steady interest in recent IPOs. In Aegis Vopak Terminals, global names like Government Pension Fund Global, Aberdeen Standard, and Goldman Sachs picked up stakes in May. Schloss Bangalore attracted the likes of CLSA, Citigroup Global Markets, Societe Generale, Fidelity, and Morgan Stanley in May. In June, the Government of Singapore invested in Kalpataru, while HDB Financial Services saw participation from marquee investors such as BlackRock, Abu Dhabi Investment Authority, Schroders, Allianz, and HSBC Global, according to Prime Database. It is not just IPOs, foreign investors have been active in QIPs too. In June, Nomura Funds Ireland PLC picked up a stake in Kaynes Technology, while Capri Global Capital attracted big names like Societe Generale, Citigroup Global Markets Mauritius, Morgan Stanley Asia, Goldman Sachs, and BlackRock. Also read: Mint Explainer: How Sebi sniffed out Jane Street's market manipulations
Globe and Mail
19-06-2025
- Business
- Globe and Mail
Beyond the U.S.: Top Strategies Using International ETFs
International equities have undoubtedly been a top-performing asset class so far in 2025. Analyzing the performance of the MSCI ACWI Total Return Index compared to the MSCI ACWI ex USA Total Return Index reveals clear outperformance, with a year-to-date return of 15.99% versus 6.85%. Looking below the surface, particularly at the equity market returns of seminal countries within the MSCI ACWI ex USA Total Return Index, the relative underperformance of the US equity market is evident. Differing Ways to Invest Internationally For investors seeking exposure to international equities, several strategies are available to access this asset class in unique and distinct ways. Value-Oriented Approach: For value-oriented investors, both the CI First Asset Morningstar International Value Index ETF (Tickers: VMX / VXM.B) and Fidelity International Value Index ETF (Ticker: FCIV) focus on identifying and investing in equities that appear undervalued by the market, typically trading for less than their intrinsic worth, which is determined through fundamental analysis, such as evaluating earnings, assets, and cash flow. Low Volatility Approach: Against the backdrop of an uncertain macroeconomic environment, the effectiveness of the low-volatility investment factor has been evident to investors. For those seeking to invest in international equities with a defensive approach, the BMO Low Volatility International Equity (Tickers: ZLI / ZLD) and TD Q International Low Volatility ETF (Ticker: TILV) provide exposure to equities that experience less fluctuation than their counterparts, resulting in improved risk-adjusted performance and delivering compelling returns. Dividend-Oriented Approach: The importance and impact of dividends when investing over a long time horizon have been well established. So much so that some investors take a 'dividend-focused' approach to their equity investing, companies that have issued and raised their dividend payouts have historically provided greater total returns with less volatility, making this approach to dividend investing the most common. For investors seeking an international equity solution with a dividend focus, the Purpose International Dividend Fund ETF (Ticker: PID) and Manulife Smart International Dividend ETF (Ticker: IDIV.B) are noteworthy options. The Combination Approach: For investors interested in a solution that combines low volatility and dividend investing, the Franklin International Low Volatility High Dividend Index ETF (Ticker: FLVI) provides that combination. Its low volatility focus ensures that the portfolio consists of less volatile stocks than their peers, while the high-dividend focus favors stocks with yields supported by earnings and relatively low price and earnings volatility. This combination results in a portfolio that offers both income generation and stability. FLVI allows investors to pursue a proven investment strategy that offers inherent risk mitigation and a selection of equities best suited to thrive during the fluctuations of an economic cycle. Furthermore, the solution's dividend focus adds an additional layer of investment security, as the fund will prioritize companies capable of sustainably paying dividends over time. Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
CNBC
06-06-2025
- Business
- CNBC
International stocks are ahead of the U.S. so far this year—how to add them to your portfolio
For investors, the U.S. has been the place to be in recent years. Over the past decade and a half, the S&P 500 — a measure of the broad U.S. stock market — has returned an annualized 14.2%. The MSCI ACWI ex-USA index, which measures the performance of stocks from pretty much everywhere else, logged a return of 6.5% over the same period. Since the start of 2025, however, investors are eschewing U.S. stocks in favor of international names. So far this year, the ACWI ex-USA index has returned 15.7%, trouncing the 1.5% return in the S&P. "In 2025 thus far, there are some clear indications that investors are adopting the 'ABUSA' ('Anywhere But the USA') mindset," says David Rosenstrock, a certified financial planner and director of financial planning and investments at Wharton Wealth Planning. "This shift is partly driven by concerns over market volatility in the U.S., uncertainty regarding policies and relatively weaker performance compared to global counterparts," he says. So is it time to invest in foreign stocks? Yes and no, say financial pros. You shouldn't make any wholesale changes to your portfolio mix based on short-term market results, they say. But if you have little or no foreign exposure, diversifying is likely a savvy move over the long term. Here's why. If you were born in the 90s, you may have never been invested during a sustained period during which foreign stocks outperformed domestic names, as they did in the back half of the 80s and much of the early 2000s. If that's the case, you may be tempted to continue ignoring foreign stocks, even after the recent uptick. "The problem is those trends tend to tend to reverse over time," says Amy Arnott, a portfolio strategist at Morningstar. "So even if the U.S. is outperforming over a very long period, like it did [in the 15 years] through 2024, eventually that trend reverses." While it may feel like the U.S. has dominated stock markets forever, it wasn't that long ago that foreign firms were delivering better returns. From 2001 to 2010, for instance, the ACWI ex-US index submitted a cumulative total return of 71.5% compared with a 15% gain in the S&P 500. Adding some foreign stocks to your portfolio can help guarantee at least some exposure to whichever side is performing better over the many years you're likely to invest. "True diversification means tapping into different economic cycles, monetary policies and growth drivers. It offers exposure to unique industries," says Marcos Segrera, a CFP and principal at Evensky & Katz/Foldes Wealth Management. "Furthermore, owning foreign stocks is a crucial way to diversify away from U.S.-specific risks." If you're looking to invest in foreign stocks, the most effective way to do it is by adding a low-cost index mutual fund or exchange-traded fund, says Arnott. "That way, you can get international diversification in one package and get exposure to a large number of companies and countries outside of the U.S.," she says. Market watchers generally divide foreign stocks into two camps: those that come from "developed" economies, such as those in Japan, Australia and several European countries, and emerging markets, such as China, India and much of Latin America. You can buy funds which invest in either, but "to keep things simple," owning a "total international stock" fund — such as one that tracks the MSCI ACWI ex-USA or something similar — will get you exposure to both, says Arnott. And while you may have powerful convictions about the future of a particular country and its economy, you'd be wise to avoid tilting your foreign exposure too much in that direction, Arnott says. Putting all your eggs in one country or region's basket, she says, can result in big swings in your portfolio. "It can be tempting to do that when there's a lot of excitement about Asia Pacific stocks or Latin America, or things like that," she says. "But it's difficult to use those types of funds in a portfolio just because they are more volatile, more narrowly defined, and people unfortunately have a tendency to sometimes see performance over the past few years and buy in at the wrong time."
Business Times
29-04-2025
- Business
- Business Times
‘Exodus' of US assets set to intensify, says strategist
GLOBAL investors are rotating out of US assets not because of uncertainty over tariffs, says strategist Marko Papic of BCA Research, but because non-US assets are more attractive, particularly as the US dollar is expected to weaken over time. Papic wrote in a recent note: 'The big picture is that the market narrative of US exceptionalism is dead. So, it doesn't really matter what happens with the trade war. President Trump has catalysed what was always going to happen, which is the rotation of capital away from extremely expensive US.' He maintains that the market story of 2025 is that 'global investors are using the catalyst and news flow of the trade war to lighten their exposure to US assets'. 'The trade war noise is providing cover for an absolute exodus out of the US.' This is evident in the year-to-date underperformance of Nasdaq and S&P 500 relative to the rest of the world. The Nasdaq is down by 10 per cent and S&P 500 by 6 per cent. In contrast, MSCI ACWI ex-US is up by more than 7 per cent; MSCI Europe by 3 per cent; China by more than 9 per cent; and Asia ex-Japan by 1 per cent. Papic is BCA Research chief strategist, whose analyses combine geopolitics and markets in a framework called GeoMacro. He was in Singapore last week for a conference by the Investment Management Association of Singapore, where he was on the podium to share his views on 'extracting geopolitical alpha'. He spoke to BT on the sidelines of the conference. US dollar, assets to weaken The US dollar is 'way too strong', he said, and could weaken by 30 to 50 per cent over the next five years. This would make US goods and services more attractive, and effectively rebalance trade for the US in a more 'gentlemanly' fashion than tariffs. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Americans will be able to say – look, we're more attractive. Investment and factories will naturally move (to the US). Everything that Trump wants to do via threats and aggression will happen in a gentlemanly way, because currency depreciation is an across-the-board gentleman's tariff. The reason that rivals and partners are not going to be mad is because it's not permanent. Currencies go up and down.' He expects the value of US assets to deflate over the next five years. 'This doesn't mean the S&P 500 doesn't end the year positive; it may go up 7 or 10 per cent. But if the dollar declines by 7 per cent, in currency-adjusted returns, someone in Japan, Singapore or Europe would do better in other equity markets. 'Most investors, whether they're individuals or family offices or long-term pension funds, are up to their necks in US assets and US dollars… If you take some of the proceeds over the last five to 10 years and invest in foreign assets in a very diversified way, that will be the smartest thing to do over the next five years.' Singapore's future role Singapore, he observed, is feeling 'a lot of consternation' with the onslaught of tariffs and the trade war. But that consternation, he argued, is 'built on two false narratives'. The first narrative is the belief that globalisation is ending. This, he argued, is not so. 'Exports as a percentage of global GDP have been stable at 30 per cent for the past seven years. That's not going away. Trump's actions are causing other countries to start redoubling on globalisation. Singapore will be fine.' The second is that Singapore has traditionally played the role of helping to 'grease the wheels of US-China cooperation'. But Singapore, he said, should position itself as the 'financial capital of a multi-polar world'. 'That's where Singapore's long-term relationship with the US could be a detriment. Singapore may have to take a stand, or take no stand.' He believes the future lies in facilitating capital in a 'non-aligned Global South', and 'whoever gets there faster wins'. He sees other financial centres competing for leadership in this, including India, Abu Dhabi and Hong Kong. The Global South refers to countries mainly in Asia, Africa and Latin America. 'The next 30 years are going to be about South to South… not so much goods but capital flows and savings. I think that's where Singapore's future is.' In his GeoMacro reports, Papic has written on what he sees as an exodus out of US assets, as well as over-valuation and false narratives by Big Tech companies. One of the drivers of the funds outflow is the realisation that the 'fiscal gravy train' is slowing. Until recently the US stock market, especially tech stocks, has been buoyed by expectations of a generous fiscal package under Trump. But Trump, he wrote, will increasingly face the 'tightening noose of material constraints'. One constraint is the US bond market, which has not rallied as much given the rising odds of a recession. If bond yields remain elevated, then Trump may not be able to follow through with expected tax cuts, as fiscal spending may be opposed by conservatives in the House. 'The material constraints against Trump are coming fast and hard. Bond yields are too high, fiscal conservatives in the House are revolting and negotiating trade with the entire world at the same time seems folly.'
