Core Insights - The shift in focus from domestic tech investments to international investing is gaining momentum due to the high concentration of U.S. equities, where the top ten stocks account for 40% of the index [1] Group 1: International Investment Opportunities - International markets represent approximately 35% of global benchmarks, yet the average private client portfolio only allocates about 5% to these markets [3] - Over 70% of investable equities are located outside the U.S., often trading at 20-year valuation lows, presenting a significant opportunity for diversification [3] Group 2: Investment Strategies - The panel highlighted the risks associated with market-cap weighting in international indexes, suggesting that passive investment strategies may lead to exposure to stagnant "museum stocks" [4] - Active or factor-based ETFs are recommended to capture growth in emerging markets like India and Japan [4] Group 3: Managing Risks - Currency volatility is a concern for international investments, but currency-hedged ETFs can help mitigate overall portfolio risk [5] - The panel emphasized that international investing should be viewed as a form of insurance rather than merely a performance chase [5] Group 4: ETF Offerings - American Century offers several ETFs for international exposure, including the American Century Quality Diversified International ETF (QINT), Avantis International Small Cap Equity ETF (AVDS), and Avantis Emerging Markets Equity ETF (AVEM) [5] - Franklin Templeton's international ETF lineup includes the Franklin International Dividend Booster Index ETF (XIDV), Franklin International Core Dividend Tilt Index ETF (DIVI), and Franklin International Low Volatility High Dividend Index ETF (LVHI) [6]

Core Viewpoint - The MSCI EAFE Index has declined nearly 6% over the past month due to rising oil prices and geopolitical tensions, particularly the military conflict in Iran, but this presents an opportunity for investors to consider international equity ETFs like the ALPS O'Shares International Developed Quality Dividend ETF (OEFA) [1] Group 1: Market Context - The decline in the MSCI EAFE Index is not surprising as many developed markets within the index are energy importers [1] - Despite the recent downturn, the bull market for international equities remains intact, suggesting potential for long-term investment [1] Group 2: Investment Opportunity - OEFA focuses on metrics such as company leverage, dividend growth, and return on assets (ROA), making it a compelling option for investors seeking both near-term buffer and long-term rewards [1] - The ETF's exposure to international stocks may help balance portfolios that are heavily weighted towards U.S. equities, especially as the dollar weakens [1] Group 3: Sector Exposure and Diversification - OEFA allocates 27.58% of its weight to industrial stocks, which is its largest sector exposure, benefiting from increased European defense spending [1] - The ETF provides efficient diversification, with only 11% of its weight in the tech sector, offering protection against sector rotation affecting tech-heavy benchmarks [1] Group 4: Dividend Growth Potential - OEFA has a trailing 12-month yield of 2%, indicating that dividend obligations are manageable for its member firms, which supports the potential for payout growth [1]

Core Viewpoint - U.S. investors typically exhibit a home bias, favoring domestic investments, particularly in U.S. ETFs, despite the potential benefits of international diversification [1][2]. Group 1: Investment Trends - Many investors are advised to include international stocks in their portfolios, yet a significant number avoid overseas markets due to underperformance in the past decade [2]. - The past year has highlighted the importance of diversification, with market drivers shifting from mega-cap growth and tech to value, small-caps, defensive equities, and international stocks [2]. Group 2: Vanguard Total International Stock ETF - The Vanguard Total International Stock ETF (NASDAQ: VXUS) tracks the FTSE Global All Cap ex-US Index, encompassing over 8,000 stocks from developed and emerging markets outside the U.S., with a low expense ratio of 0.05% [4]. - This ETF presents a significant investment opportunity, as S&P 500 companies have historically outperformed international equities, but cycles of performance can shift [5]. Group 3: Current Market Conditions - International stocks are currently perceived as undervalued compared to the S&P 500, which may lead to a favorable growth-plus-value narrative for these equities [6]. - Earnings growth forecasts for 2026 indicate S&P 500 earnings growth at approximately 13%, with non-U.S. developed markets at 9% and emerging markets leading with a projected 17% growth rate [7]. - The Vanguard Total International Stock ETF has a price/earnings (P/E) ratio of 17.5, significantly lower than the S&P 500's 28.2, suggesting a more attractive investment option moving forward [8].

分组1 - Over the past year, international stocks have significantly outperformed U.S. equities, with the State Street SPDR Portfolio Devt World ex-US ETF (SPDW) rising by 37%, including dividends, while the S&P 500 ETF (SPY) has only returned 14% [1]

Core Insights - The MSCI EAFE Index has significantly outperformed the S&P 500 since the beginning of last year, with a trailing 12-month dividend yield of 3.36%, which is approximately three times higher than that of the domestic benchmark [1] - The NEOS MSCI EAFE High Income ETF (NIHI) offers a distribution rate of 13.37% and a 30-day SEC yield of 2.92%, making it an attractive option for income-focused investors [1] - NIHI employs a straightforward strategy by writing covered calls on the iShares Core MSCI EAFE ETF (IEFA), providing a clear approach to generating elevated international equity income [1] Group 1: Market Performance - International equities are experiencing strength due to both US policies and internal factors, with European markets showing improvement driven by political and economic developments [1] - Japan's corporate governance reforms and reflation efforts have revitalized its market, indicating potential for further growth in MSCI EAFE member firms [1] Group 2: Investment Outlook - The investment community consensus suggests that international stocks remain attractively valued compared to domestic peers, with expectations of a multi-year upward trend [1] - Expert forecasts indicate higher returns for non-US equities over the next decade, encompassing both developed and emerging markets [1]

Core Insights - The podcast discusses international investing, highlighting that international stocks outperformed US stocks in the previous year and exploring whether this trend can continue and where the current opportunities lie [3][10]. Economic Environment - The macroeconomic situation in Europe has been improving, with positive news on inflation, growth, and interest rates, yet uncertainty is rising due to various market disruptions [4][6]. - January was noted as a particularly volatile month, with significant events impacting market sentiment [6]. Market Valuations - European markets performed well in 2025, but current valuations are around fair value estimates, indicating that while equities are not expensive, they are not undervalued either [8][9]. - There are still opportunities in specific sectors and styles despite the overall market being fairly valued [12]. Country-Level Opportunities - Germany and the UK are highlighted as relatively attractive markets, trading a few percent under fair value estimates, while the Netherlands and Denmark are noted for having the cheapest valuations in Europe [14][15]. Small Cap Stocks - Small cap stocks in Europe are still seen as more attractive compared to large caps, with a larger gap between their valuations and the general market [19]. Sector Opportunities - **Consumer Defensive Stocks**: This sector is expected to benefit from lower inflation and interest rates, leading to increased consumer spending [21][23]. Companies are investing more in branding to regain consumer interest [25]. - **Technology**: European tech stocks are currently undervalued, particularly in the software segment, which has lagged behind hardware stocks [30]. There is potential for a correction in share prices as investor sentiment improves [30]. - **Healthcare**: The sector is seen as defensive with strong cash flows and dividends, but has faced negative sentiment due to various uncertainties. GSK is highlighted for its diversified exposure across the pharma sector, providing stability [32][50]. Stock Picks - **SAP**: Identified as a strong pick due to its growth potential and significant upside despite recent share price declines [36][40]. - **Diageo**: Recommended for its global diversification and potential recovery as inflation decreases and consumer spending increases [41][44]. - **GSK**: Chosen for its strong performance relative to peers and diversified product pipeline, which offers stability in a volatile market [48][51].

Core Insights - International markets have outperformed US markets, leading to a shift in investment strategies away from the US due to higher valuations and a loss of confidence in US assets [5][6][12] - The US dollar has depreciated significantly, impacting the attractiveness of foreign investments, particularly in Europe and emerging markets [20][23][34] Market Performance - Major international markets, especially in Europe, have shown strong performance, with southern European countries like Portugal, Spain, and Italy returning over 30% in euros [8][26] - The S&P 500, despite a 17% rise, did not rank among the top 10 performing markets, highlighting the relative underperformance of US equities [6][24] Investment Trends - Investors are reallocating capital from US assets to international markets, driven by geopolitical uncertainties and the desire for better returns [10][12][17] - The trend of diversifying investments into foreign markets is becoming more pronounced, with a focus on undervalued assets and higher dividend yields in countries like Portugal [32][33] Economic Factors - Policy changes, including tariffs and trade uncertainties, have increased equity risk premiums and affected US stock performance on a global scale [10][11][20] - The expectation of continued dollar devaluation may lead to further capital outflows from US assets, as foreign investments become more appealing [22][23] Future Outlook - The expectation is for international markets to continue outperforming US markets in the coming years, with a focus on diversification and risk management [24][27] - Portugal is emerging as an attractive investment destination due to its stability, access to the EU market, and favorable economic conditions [31][34]

Group 1 - The S&P 500 index has achieved its third consecutive year of over 15% total returns and is up 2% at the start of 2026, but U.S. stocks are now historically expensive with a P/E ratio exceeding 28 for the Vanguard S&P 500 ETF and almost 39 for the Vanguard Information Technology ETF [1] - Investors are increasingly shifting towards value-oriented stocks, including defensive sectors like consumer staples and utilities, as well as low-volatility stocks and small caps, while also exploring opportunities in international markets [2] Group 2 - International stocks are trading at significant discounts compared to the S&P 500, with the Vanguard Total International Stock ETF having a P/E ratio of 17, making it approximately 40% cheaper than the S&P 500, and are expected to outperform due to stronger growth profiles and favorable monetary policies [3][4] - The IMF projects U.S. economic growth at 2.4% for 2026, which is better than the Eurozone and Japan, but emerging markets are anticipated to see the highest growth at 4.2%, particularly in Asia, which is crucial for AI development [5] - Investing in international stocks diversifies away from the tech-heavy S&P 500, with the Vanguard Total International Stock ETF's top sector holdings being financials (23%), industrials (15%), technology (14%), and consumer discretionary (10%), allowing for a broader exposure to cyclicals while maintaining some growth allocation [6]

Welcome to ETF Edge, your go-to place for all things exchange traded funds. I'm your host, Dominic Chu. Geopolitical tensions, domestic headlines, currency flows, and the Fed have reignited that whole US versus international investing debate.So joining me now are John Mayer, the chief ETF strategist over at JP Morgan, alongside Tim Seymour, the chief investment officer at Seymour Asset Management. He's also a CNBC contributor. Uh gentlemen, thank you both for being here with us today for ETF Edge.Uh perhaps ...

Core Insights - The renewed interest in international markets is driven by geopolitical tensions, currency flows, and a weakening dollar, leading to a diversification from US-centric portfolios [1][5][24] - Active management in ETFs is gaining traction, with a significant increase in flows and new fund launches, particularly in international markets [20][23][48] ETF Market Trends - 2025 has been a record-breaking year for ETFs, with over 1,000 new ETFs launched, 83% of which are actively managed [3][20] - US trading volume reached $58 trillion, surpassing previous records, with strong flows into ETFs continuing from the previous year [3][4] International Market Performance - International markets have outperformed the US by approximately 16% over the past 14 months, indicating a performance catch-up after years of underperformance [6][8] - The dollar's weakening has contributed to increased flows into international markets, with over $216 billion in flows last year, marking a 100% increase [4][5] Investment Opportunities - There is a growing interest in European and emerging markets, driven by lower interest rates and a shift in market dynamics [24][25] - Specific sectors such as technology, particularly in Asia, and commodities in Latin America are highlighted as key areas for investment [30][40] Active Management in ETFs - Active ETF flows in the US reached $470 billion, a 60% increase from the previous year, indicating a shift towards actively managed portfolios [20][48] - Funds focusing on international value and emerging markets are seeing significant net flows, reflecting investor interest in these areas [21][22] Geopolitical and Economic Factors - Geopolitical developments, such as trade agreements and shifts in global economic dynamics, are influencing investment strategies and market allocations [16][45] - The trend of deregulation in Europe is seen as a powerful driver for investment opportunities, enhancing the attractiveness of international markets [14][46]