Breaking the Bias: How to Approach International Investing
Did home bias creep into your portfolio? International equities are soaring; learn why investors should use a fundamentals-based active strategy to fix their overweight.
A heavy home bias in portfolios left many investors on their back foot this year. Stephen Brown, ETF Specialist at AllianceBernstein, shared how investors should approach adding international allocations at Future Proof 2025.
Opening: International's Overlooked Opportunities
Nadig: Where do you get started when you're trying to break into that home bias problem?
Brown: A lot of folks have forgotten about international this year. International equities have been on a tear.
The Heavy Home Bias in Portfolios
Nadig: Dave Nadig, ETF.com, joined by Stephen Brown, ETF Specialist at AllianceBernstein. So, Stephen, something I've been hearing from advisors here, and I'll shorthand it is, "Oh crap, I forgot my international exposure." There seems to be a bunch of this head scratching about the home bias that's accidentally crept into a lot of portfolios with the incredible markets we've had in the US, kind of until this year. Talk to me a little bit about that switchover towards thinking about international again.
Brown: Yes, Dave, spot on. We've been fielding a ton of questions from advisors about, “Where do I go for international exposure?” At AB, we're all in on active management – adaptive active management. For international exposure, we believe in taking a fundamental approach focused on factors like quality, stability, and price to seek out those opportunities offshore.
Nadig: So, what's your advice to an advisor who's calling and rethinking that positioning? Obviously, there's a lot of options out there on the street. They could be looking at indexes, they could be looking at active managers such as yourself, they could be looking at country selection issues. Where do you get started when you're trying to break into that home bias problem?
Brown: So, you mentioned active and passive. We're all in on active, but we don't think it needs to necessarily be a replacement. Active management has a role in portfolios alongside passive management. But again, when it comes to international exposure, a lot of folks have forgotten about international this year. International equities have been on a tear. It does have a place in portfolios. And, you know, you just want to have a disciplined manager, someone who has a deep research-driven approach with technology as well as human insight.
Fun in the Sun at Future Proof
Nadig: And talk to me a little bit about why you're at an event like this, talking to a whole lot of advisors out here in the sun.
Brown: I don't think there's a better event for advisors. Future Proof – I mean, we're in shorts. It's great to be out here in the open air on the beach.
Nadig: Bush is playing later.
Brown: Exactly. Exactly. You have music, you have networking, but the providers are here, the advisors are here. It's not just the asset managers, it's wealth providers. This is not a paid sponsorship, by the way. This is my fourth year at this event, and I keep coming back, and it's just really a fantastic time.
Nadig: Well, great. Hope we'll see you next year too.
Brown: Thanks, Dave.
Nadig: Cheers, Stephen.
