Thornburg Discusses Future Returns With International Equities

Core Viewpoint - The current market environment suggests that international equities may offer better future returns compared to U.S. equities, which have been dominant for decades but may not align with underlying fundamentals [1][3][5]. Market Environment - The macroeconomic backdrop is shifting towards international equities due to cyclical market leadership, with the U.S. potentially losing its long-standing position [3][4]. - Factors such as tariffs, inflation, interest rate cuts, and a declining U.S. dollar are making international equities more attractive [4]. Earnings Growth - Earnings growth in regions like Europe and Japan is outpacing that of the U.S., indicating that U.S. equities may have reached a peak in performance relative to their fundamentals [5]. Investor Sentiment - A survey indicated that 52% of respondents have a 10%-20% allocation to international equities, with nearly 50% expecting continued outperformance from these markets [6][7]. Investment Strategy - Thornburg Investment Management employs a bottom-up approach to international investing, focusing on three pillars: seeking underappreciated opportunities, maintaining a resilient foundation, and ensuring execution capability [8][9]. - The firm manages $52 billion in assets and offers active ETFs, including the Thornburg International Equity ETF (TXUE) and Thornburg International Growth Fund ETF (TXUG), to navigate international markets [9].