IN FOCUS6-8 min read

Schroders Equity Lens May 2023: your go-to guide to global equity markets

This month's edition looks at the credit rating profiles of different equity markets as well as the resurgence of Big Tech, alongside our usual wrap-up of everything you need to know in equity markets.

05-12-2023
Photo of Milan business district skyline

Authors

Duncan Lamont, CFA
Head of Strategic Research
See all articles

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 monthly publication – the Schroders Equity Lens, a compilation of key trends in global equities illustrated through thought-provoking charts.

Click here to download your May copy.

Summary:

  • Major developed markets are having a strong year, powered by rising valuations amidst weak earnings (slide 11). European equities are up almost 17% in USD terms to end April. Emerging markets (EM) are lagging a long way behind in aggregate, but a number of EM markets have delivered much better performance (slide 12)
  • Different equity indices have different credit ratings splits. All are investment grade but the FTSE 100 is weaker than elsewhere (slide 5). This matters as lower rated companies tend to be more volatile (slide 6).
  • Big tech is in the driving seat once again. Seven US mega-cap companies have collectively returned 34% this year. The rest of the US market is up only 3% (slide 7)
  • Corporate profitability remains under pressure due to rising costs (slide 8). But upgrades to earnings have started outpacing downgrades in European equities (slide 18). Downgrades still dominate everywhere else
  • Japanese and EM equities remain the cheapest valued vs history. The US continues to be the most expensive (slide 19).

Chart of the month:

Chart showing the different credit profiles of major equity markets

Click here for the May version of the Equity Lens.

Authors

Duncan Lamont, CFA
Head of Strategic Research
See all articles

Topics

Market views
EquityLens
Alpha Equity
Equities
Global
Duncan Lamont
Contact Schroders
Follow us

Please consider a fund's investment objectives, risks, charges and expenses carefully before investing.

The website and the content included is intended for US-based financial intermediaries (and their non-US affiliates) on behalf of those of their clients who are both (a) not “US persons” as that term is defined in Rule 902 under the United States Securities Act of 1933, as amended (the “1933 Act”) and (b) “non-United States persons” as that terms is defined in Rule 4.7(a)(vi) under the Commodity Exchange Act of 1936, as amended. None of the funds described herein is registered as an “investment company” as that term is defined in the United States Investment Company Act of 1940, as amended, and shares of the funds described herein have not been and will not be registered under the 1933 Act or the securities laws of any of the states of the United States. The shares may not be offered, sold or delivered directly or indirectly in the United States or for the account or benefit of any “US person.”

The information contained in this website does not constitute an offer to purchase or sell, advertise, recommend, distribute or solicit a subscription for interests in investment products in any Latin American jurisdiction where such would be unauthorized. The information contained in this website is not intended for distribution to the public in general and must not be reproduced or distributed, entirely or partially to any individuals who are not allowed to receive it according to applicable legislation. The investment products and their distribution may not be registered in Latin America, and therefore may not meet certain requirements and procedures usually observed in public offerings of securities registered in the region, with which investors in the Latin America capital markets may be familiar. For this reason, the access of the investors to certain information regarding the investment products may be restricted. Financial intermediaries and Advisors must ensure the information provided in this website is appropriate and suitable to the receiver’s domicile and jurisdiction and according to the applicable legislation.

Issued by Schroder Investment Management (Europe) S.A., 5 (“SIM Europe”), rue Höhenhof, L-1736 Senningerberg, Luxembourg. Registered No. B 37.799

Schroder Investment Management North America Inc. (“SIMNA”) is an SEC registered investment adviser, CRD Number 105820, providing asset management products and services to clients in the US and registered as a Portfolio Manager with the securities regulatory authorities in Canada.  Schroder Fund Advisors LLC (“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker-dealer with FINRA and as an Exempt Market Dealer with the securities regulatory authorities in Canada.  SFA markets certain investment vehicles for which other Schroders entities are investment advisers.

Schroders Capital is the private markets investment division of Schroders plc.  Schroders Capital Management (US) Inc. (“Schroders Capital US”) is registered as an investment adviser with the US Securities and Exchange Commission (SEC).  It provides asset management products and services to clients in the United States and Canada.  For more information, visit www.schroderscapital.com

SIM (Europe), SIMNA, SFA and Schroders Capital are wholly owned subsidiaries of Schroders plc.

© Copyright 2023 Schroder Investment Management North America Inc