Core Viewpoint - Goldman Sachs anticipates that European and emerging-market equities will outperform the U.S. stock market over the next decade, with the S&P 500 projected to return 6.5% annually compared to 7.5% for European stocks and 12.8% for emerging-market stocks [1][2]. European Equities - European stocks are expected to achieve a 7.5% annual return, driven by strong earnings growth, a high dividend yield of approximately 3%, and stock buybacks [2]. - The Vanguard FTSE Europe ETF tracks around 1,200 companies in Europe, with significant weight in financials (24%), industrials (19%), and healthcare (13%) [5]. - Over the past decade, the S&P 500 outperformed the Vanguard FTSE Europe ETF, returning 335% (15.8% annually) compared to 174% (10.5% annually) for the European ETF [5][6]. - Analysts believe that European stocks, trading at cheaper valuations, could outperform U.S. stocks due to the historical expense of U.S. equities and a projected decline in the U.S. dollar relative to the euro [6]. Emerging-Market Equities - Emerging-market stocks are projected to return 12.8% annually, bolstered by strong earnings growth in China and India [2]. - The Vanguard FTSE Emerging Markets ETF measures the performance of about 6,200 companies, with a focus on technology (29%), financials (21%), and consumer discretionary (12%) [9]. - The Vanguard FTSE Emerging Markets ETF returned 162% (10.1% annually) over the last decade, significantly lagging behind the S&P 500, which returned 335% [9][10]. - Analysts expect emerging-market stocks to outperform due to stronger earnings growth, higher dividend yields, and a weakening U.S. dollar against emerging-market currencies [10]. Investment Options - The Vanguard FTSE Europe ETF has a low expense ratio of 0.06%, making it a cost-effective option for investors seeking exposure to European equities [8]. - Similarly, the Vanguard FTSE Emerging Markets ETF also features a low expense ratio of 0.06%, which is significantly lower than the average expense ratio of 1.13% for similar funds [11].

Core Insights - "Top Dog" status, defined as being the 1 company by market capitalization, often leads to underperformance rather than continued success, as highlighted by billionaire investor Rob Arnott [1][4][5] - Historical data shows that sector leaders underperform their peers by approximately 300 to 400 basis points annually over the following decade [5][6] - The current "Magnificent Seven" (Mag 7) stocks, while dominant, are beginning to show signs of underperformance compared to the S&P 500 Index [9][10] Performance Trends - Arnott's research indicates that once a company reaches market cap dominance, it faces increased scrutiny, heightened expectations, and intensified competition, which can lead to a decline in performance [2][4] - The Mag 7 stocks have seen their combined net cash position decline from around $300 billion in 2017 to less than zero today, indicating a shift in financial health [11] - The capital-intensive nature of AI investments is becoming a burden, with significant spending on infrastructure and technology that may not yield immediate returns [12][13] Market Dynamics - Investors are expected to demand clearer timelines for free cash flow generation from the Mag 7, which could lead to a reevaluation of their valuations [15] - The shift in market sentiment does not require a recession; rather, it can occur simply through adjustments to more realistic expectations [15][16] Investment Opportunities - Eric Fry suggests reallocating investments from the Mag 7 to sectors with lower expectations and improving fundamentals, such as copper, which is projected to see prices reach at least $8.00 per pound by 2026 due to supply constraints and rising demand [17][18] - European stocks are also highlighted as a potential investment opportunity, as they trade at a discount compared to U.S. stocks while offering reliability in an increasingly unpredictable global market [20][23] Government Initiatives - A $500 billion government mobilization, referred to as the Genesis Mission, aims to support advancements in AI and other technologies, presenting investment opportunities in smaller, less-known companies [25][26][27]

Core Insights - Diversification remains a successful investment strategy, with international stocks significantly outperforming U.S. equities in 2025, as evidenced by the S&P 500's 15% increase compared to Spain's 40% and South Korea's 65% gains [1] Group 1: International Stock Performance - South Korea's KOSPI Composite Index has risen over 65% YTD, driven by favorable domestic policies and a tech sector buoyed by AI advancements [3] - Spain's IBEX 35 index has increased more than 40% YTD, supported by a booming banking sector and a GDP growth of 3%, nearly tripling the overall EU GDP growth [5][7] - The Canadian stock market has seen gains exceeding 30% in 2025, with the iShares MSCI Canada Index Fund up nearly 35%, benefiting from reduced tariffs and strong performance in megacap banks [12][15] Group 2: ETFs for International Exposure - The Franklin FTSE South Korea ETF (NYSE:FLKR) offers exposure to South Korean equities with a low expense ratio of 0.09%, heavily weighted towards Samsung Electronics and SK Hynix [4] - The iShares MSCI Spain ETF (NYSE:EWP) has a 0.50% expense ratio and $1.6 billion in AUM, with over 40% of its holdings in the finance sector, including major banks like Santander and BBVA [7] - The Franklin FTSE Latin America ETF (NYSE:FLLA) provides broad exposure to Latin American markets with a 0.19% expense ratio, focusing on Brazilian and Mexican stocks [10] - The Vanguard FTSE Europe ETF (NYSE:VGK) has gained nearly 35% YTD, with a low expense ratio of 0.06% and a diverse portfolio of over 1,200 stocks [11] - The iShares MSCI Canada Index Fund (NYSE:EWC) has a 0.50% expense ratio and focuses on major banks, with top 10 holdings accounting for over 43% of its assets [15]

Core Insights - Vanguard is the second-largest issuer of exchange-traded funds (ETFs) in the U.S. by assets under management (AUM) and is poised to potentially take the top spot soon [1] - The Vanguard FTSE Europe ETF has emerged as a top performer in 2025, with a year-to-date increase of approximately 25% [4] Fund Composition and Performance - Vanguard manages 99 ETFs, with 62 focused on equities and 37 on fixed-income markets, providing a diverse range of investment options [2] - The Vanguard FTSE Europe ETF invests in companies across various European countries and has been a leader in performance within Vanguard's offerings [3][4] Market Trends and Drivers - The ETF's success is attributed to a global shift towards European industrials and financial services, contrasting with the U.S. market's focus on communication services and technology [5] - European defense spending is significantly increasing, with projections of reaching $446 billion in 2025, which supports the ETF's industrial exposure [7][8] Financial Services Sector - European banks included in the ETF have performed well, compensating for lower interest rates by increasing noninterest income and trading profits [9] Future Outlook - Analysts predict strong earnings growth for eurozone financial services and industrial stocks in 2026, with potential positive impacts from increased fiscal spending in Germany [11] - French and German stocks make up nearly 29% of the ETF's portfolio, suggesting favorable conditions for continued performance [12]

Core Insights - Vanguard index funds tracking European and international stocks have shown strong performance in 2023, attributed to changes in U.S. trade and fiscal policy [1] - The Vanguard FTSE Europe ETF and Vanguard FTSE Developed Markets ETF have gained 29% and 28% year to date, respectively, outperforming the S&P 500 by 15 and 14 percentage points [4][8] - Despite recent outperformance, European and international stocks have historically underperformed U.S. stocks over longer periods [4][8] Vanguard FTSE Europe ETF - The Vanguard FTSE Europe ETF tracks over 1,200 stocks in major European markets, with significant weight in the U.K., France, and Germany, and sectors like financials, industrials, and healthcare [4] - The ETF has gained 29% year to date, but over the last five years, it has only added 53%, lagging behind the S&P 500 by 43 percentage points [4] - The expense ratio for the Vanguard FTSE Europe ETF is 0.06%, significantly lower than the average of 0.81% for similar funds, making it an attractive option for investors [5] Vanguard FTSE Developed Markets ETF - The Vanguard FTSE Developed Markets ETF measures over 3,800 companies in developed international markets, with a focus on Europe and the Asia-Pacific [7] - This ETF has advanced 28% year to date, also outperforming the S&P 500, but has only gained 46% over the last five years, trailing the S&P 500 by 50 percentage points [8] - The expense ratio for this ETF is 0.03%, compared to an average of 0.85% for similar funds, providing a cost-effective option for diversified international exposure [9] Market Trends and Analysis - The U.S. dollar has depreciated by about 11% in the first half of the year, benefiting international stock investments when measured in U.S. dollars [11] - Diverging monetary policies, with the European Central Bank cutting rates while the U.S. Federal Reserve held steady, have influenced investor preferences towards international equities [12] - Despite recent trends favoring international stocks, analysts predict that U.S. equities will continue to outperform, with Goldman Sachs estimating a 7% advance for the S&P 500 over the next year [14]

Core Insights - U.S. stocks, particularly large-cap stocks, have shown strong performance over the past decade, with the S&P 500 index achieving a 15.3% annualized return, while the MSCI World ex-USA Index returned 8.4% [1] - In contrast, during the first nine months of the current year, the MSCI World Index outperformed the S&P 500, returning 25.3% compared to 14.8%, suggesting potential for international stocks to continue outpacing U.S. equities [2] ETF Analysis - The Vanguard Total International Stock ETF (VXUS) tracks the FTSE Global All Cap ex US Index, investing in 8,700 stocks with significant allocations in Europe (38%), Pacific (25.4%), and emerging markets (27.6%) as of September 30 [5] - The Vanguard Total International Stock ETF returned 26.6% for the first nine months of the year and has a 10-year annualized return of 8.3%, with a low expense ratio of 0.05% compared to the average of 0.85% for similar funds [6][7] - The Vanguard FTSE Europe ETF (VGK) aims to replicate the performance of the FTSE Developed Europe All Cap Index, including companies across various market caps in major European markets [10]

Group 1 - The U.S. government is experiencing a partial shutdown due to political divides, which may pose risks to the economy if prolonged [1][7] - Despite the shutdown, the S&P 500 index has risen approximately 14% in 2025, indicating that the market has largely overlooked the political situation [3][7] - The iShares MSCI Poland ETF has significantly outperformed the S&P 500, rising 57% in 2025, highlighting strong performance in Polish stocks [4][7] Group 2 - Caution is advised against investing in ETFs that have already seen substantial gains, as entering late may not yield favorable results [5] - Investors should consider their knowledge of Poland's economy and stock market before making significant investments in country-specific ETFs [6] - More diversified international ETFs, such as the Vanguard Total International Stock ETF and the Vanguard FTSE Europe ETF, are also outperforming the S&P 500, offering broader exposure without the need for specialized knowledge [8]

Core Insights - DoubleLine Capital is focusing on purchasing emerging market bonds, particularly those denominated in local currencies, as they are seen as a favorable investment opportunity [1][3] - The current investment environment is characterized by rising interest rates, which is a significant shift from the historical trend of falling rates over the past 45 years [2] - Emerging markets have a lower debt-to-GDP ratio compared to the U.S. and are benefiting from a weakening dollar, making local currency bonds attractive due to higher yields and better economic fundamentals [3] Investment Strategy - Gundlach suggests allocating at least 20% to local-currency emerging market bonds due to their higher yields and stronger budget fundamentals [3] - The firm is short on 30-year Treasurys in some portfolios and prefers shorter durations, specifically 3 to 5-year Treasurys [5] Market Predictions - Gundlach anticipates inflation to remain around 3%, exceeding the Federal Reserve's 2% target, especially with potential changes in Fed leadership [6] - There is a concern that the Fed may shift to a more inflationary policy, potentially leading to negative real interest rates [7]

Core Viewpoint - The Vanguard Utilities ETF is identified as a favorable investment option amidst a crowded market of ETFs, particularly for those looking to invest $1,000 now [7]. Group 1: ETF Performance and Selection - Vanguard offers a wide range of 97 ETFs, which can be overwhelming for investors [1]. - The top-performing Vanguard ETFs this year are primarily international funds, with the Vanguard International High Yield Dividend ETF and Vanguard FTSE Europe ETF leading the list [3]. - Many of Vanguard's best-performing ETFs have high valuations, with the Vanguard S&P 500 ETF's price-to-earnings (P/E) ratio at 27.6, significantly above the historical average of 16.1 [5]. Group 2: Vanguard Utilities ETF Analysis - The Vanguard Utilities ETF (VPU) owns 69 U.S. utility stocks, including major companies like NextEra Energy and Duke Energy, and has shown a year-to-date performance increase of around 15% [8]. - The P/E ratio of the Vanguard Utilities ETF is 21.4, which is lower than the S&P 500's earnings multiple, indicating a more favorable valuation [9]. - The ETF is expected to perform well if the stock market continues to rise, particularly due to the increasing demand for power from data centers supporting artificial intelligence [10]. Group 3: Economic Considerations - In the event of a stock market downturn, utility stocks are typically seen as safe havens, with most utilities having low exposure to tariff impacts [11]. - The Vanguard Utilities ETF is considered a "happy medium" investment, likely to perform better than many equity ETFs during economic downturns while potentially offering lower returns compared to other Vanguard ETFs in a strengthening economy [12].