Snapshot

The stocks that eclipsed the FAANGs


All of the most exciting developed market companies to invest in are located in the US, right? Think again.

Yes, the US stock market has powered ahead…

In terms of performance, the US stock market has dominated the global landscape for years.

It has returned 73% in the five years to 31 July 2020 (in dollar terms), leaving all but the small New Zealand market (which only includes seven stocks) in its wake.

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…but most of the top performing companies have been located outside of the US

Companies such as the FAANGs – Facebook, Apple, Amazon, Netflix, and Google – make all of the headlines.

But, investors may be surprised to learn that, over the past five years, seven of the top ten performing developed market stocks in the MSCI World index and 16 of the top 25 (in dollar terms) have been located outside of the US.

Canada, Japan, New Zealand, Sweden Australia, Germany and Denmark all feature. They span sectors as diverse as milk production, mining, and, of course, technology.

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Particularly noteworthy is that, despite the fact that Japanese stocks in aggregate have underperformed their US counterparts by 55% over the past five years, four of the top 25 performing stocks are Japanese.

So, while international markets have lagged the US and US companies may make most of the headlines, investors should ignore international stocks at their peril.

To do so could mean missing out on some of the best performing companies in the world.

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The information in this market outlook is derived from sources which we consider to be reliable. However, it may not in all cases be verified independently and we do not attest to its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Forecasts may be the consensus of extremely divergent possibilities and the full range of potential outcomes should be appreciated. No representation or warranty is made that any value (or proximity to) any value, return or forecast will be achieved. The opinions expressed are those of employees of Schroder & Co. (Asia) Limited, and reflect their judgement at this date and are subject to change. Reliance should not be placed on the views and information in this market outlook when taking individual investment and/or strategic decisions. 

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Jasper Lai

Jasper Lai

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