Schroders Equity Lens December 2023: your go-to guide to global equity markets
Epic performance, investor bullishness, even more concentrated markets, and which stock markets look cheap?
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Summary:
November was epic for equities: there have only been 11 stronger months for MSCI World since 1969 (slides 5-6)
Retail investors are increasingly bullish – having started November in bearish mood. Bullishness can be a contrarian signal: only slightly higher levels have been associated with poor future returns (slides 6-7)
The Super-7 are up 68% this year, the rest of the world, 10%. They now make up more of MSCI ACWI than Japan, UK, China, France and, now almost Canada too, combined (slide 8-9)
Deviating from the market has been a winning strategy when concentration has been high. The tables could be set to turn in favour of more actively managed strategies at last (slide 10)
Remember: US companies have consistently delivered higher return-on-equity than other markets. Outperformance is not unwarranted (slide 11)
The expected reward for investing in US equities vs bonds continues to fall (slide 12). Non-US markets and small caps (US and international) trade on cheaper valuations (slides 13, 25-27)
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