This article is part of a regular series of thought leadership pieces from some of the more influential ETF strategists in the money management industry. Today's article is by Dustin Blodgett, a portfolio specialist and member of the Investment Committee at Accuvest Global Advisors in Walnut Creek, California.
More often than not, advisors and clients move too slowly in increasing allocations away from the U.S., thus missing out on much of the international rebounds that have occurred throughout history.
This is largely due to home-country bias and not feeling as comfortable with having exposures to countries and companies with which investors aren’t as familiar.
However, half of the investment opportunity set resides outside of the U.S. (looking at market cap), and the need for advisors to help navigate their clients beyond the border for investing is increasingly important.
Below are three reasons now is the time to increase you International allocations.
1. YTD Performance
Through July 31, 2017, YTD returns show that international markets, both developed and emerging, have outpaced the U.S. market. Emerging markets have more than doubled the return of the S&P 500.
History suggests this international outperformance period will last approximately 47 months on average, adding over 80% more return than that of the U.S.