Investing in International Equities: Lessons from a Decade of Strong US Equity Markets

Abstract

The aggregate US equity market has outperformed the rest of the world over past decade. Additionally, correlation across equity markets of different geographic regions has increased over time. With this in mind, many investors question whether non-US equity investment should still play a role in diversified investment portfolios. The authors review the widely used reasons investors consider to support non-US investments and argue that the broader opportunity set and attractive relative valuations remain valid reasons.