IN FOCUS6-8 min read

Schroders Equity Lens October 2022: your go-to guide to global equity markets

Our regular analysis highlights the charts and data that matter to equity investors.

14/10/2022
equity-wooden-blocks

What’s been driving stock prices? Are they currently expensive or cheap? And which regions and sectors are poised to do well next?

These are some of the questions we aim to answer in our quarterly publication – the Schroders Equity Lens, a compilation of key trends in global equities illustrated through thought-provoking charts.

Summary

Global equities fell sharply in September. The MSCI World index posted a decline of -9.3%, taking the year-to-date fall to -25.4% (in US dollars).

UK equities remain the top performing market this year. Higher commodity prices are boosting revenues for resources companies while defensive exposure is also a benefit

US dollar strength continues to weigh on non-US equity returns when expressed in dollar terms - and boost US equity returns when they are expressed in other currencies (see page 13).

More markets are starting to look cheaper relative to their own history but may not be cheap enough given the weak economic outlook. US shares continue to look somewhat expensive on several valuation metrics (see page 21).

Companies are increasingly turning their attention to the risk of a recession and fears of recessions have never been so high. This can be measured via analysis of company transcripts (see page 6).

Our research shows that, to outperform in the long run, investors may have to stomach extended periods of underperformance along the way. 81% of companies that outperformed the US stock market in the last 10 years underperformed for at least five years (see page 10).

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