Global Markets – 2Q21 Review
Cambiar views the outlook for international equities to be attractive, on both an absolute basis as well as relative to the U.S. markets.
International equities posted their fourth consecutive quarter of positive returns, with the MSCI EAFE Index gaining 5.1% in the second quarter. International stocks have returned 32% over the past year, and an annualized return of 10.3% over the past five years. While these return figures trail the S&P 500 Index, an investment allocation to non-U.S. stocks has been a positive compounding endeavor – despite investors’ low enthusiasm for the asset class.
Using a forward 1-2 year time horizon, Cambiar views the outlook for international equities to be attractive, on both an absolute basis as well as relative to the U.S. markets. Given the asynchronized nature of global vaccination rates (and corresponding economic recovery), international markets that are earlier in the normalization process (relative to the U.S.) should be poised to outperform. Additional catalysts for international stocks include attractive valuations, a skew to value industries (which are poised to deliver strong earnings as the recovery takes hold) and accommodative monetary/fiscal stimulus policies around the world.
Certain information contained in this communication constitutes “forward-looking statements”, which are based on Cambiar’s beliefs, as well as certain assumptions concerning future events, using information currently available to Cambiar. Due to market risk and uncertainties, actual events, results, or performance may differ materially from that reflected or contemplated in such forward-looking statements. All information provided is not intended to be, and should not be construed as, investment, legal or tax advice. Nothing contained herein should be construed as a recommendation or endorsement to buy or sell any security, investment or portfolio allocation. Securities highlighted or discussed have been selected to illustrate Cambiar’s investment approach and/or market outlook. The portfolios are actively managed and securities discussed may or may not be held in client portfolios at any given time, do not represent all of the securities purchased, sold, or recommended by Cambiar, and the reader should not assume that investments in the securities identified and discussed were or will be profitable. As with any investments, there are risks to be considered. All material is provided for informational purposes only and there is no guarantee that the opinions expressed herein will be valid beyond the date of this commentary.
Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts are based upon third-party sources that are deemed reliable; however, Cambiar does not guarantee its accuracy or completeness. As with any investments, there are risks to be considered. Past performance is no indication of future results. All material is provided for informational purposes only and there is no guarantee that any opinions expressed herein will be valid beyond the date of this communication.