U.S. vs. Developed Market Equities (ex-US) Price Relative While there is potential for U.S. equities to maintain their lead in the near term due to strong earnings and market dynamics, historical cycles suggest that this dominance may wane as international markets recover and valuations adjust. Image: BofA Global Investment Strategy
Emerging Markets vs. Developed Markets Emerging economies, despite their vast populations and potential for growth, have not yet achieved a corresponding level of representation in global equity markets. Image: BofA Global Investment Strategy
Ownership of Developed Markets Government Debt Most U.S. government debt is owned domestically, while foreign investors hold a smaller but still significant portion. Image: BofA Global Investment Strategy
Developed Market Core Inflation Rates Despite efforts to combat inflation through various monetary policies, core inflation rates remain high in many developed markets. Image: BofA Global Investment Strategy
Performance – U.S. vs. Developed Market (Ex-U.S.) Will developed market equities (ex-U.S.) continue to outperform U.S. equities? Image: BofA Global Investment Strategy
Developed Market Long-Only Flows Why do equity investors hit the sell button? Image: BofA Global Investment Strategy
Performance – U.S. vs. Developed Market Equities ex-U.S. Price Relative How long will U.S. equities continue to outperform the rest of the world? Image: BofA Global Investment Strategy
Emerging Markets vs. Developed Markets Growth Differential The growth cycle usually drives emerging markets. Image: Goldman Sachs Global Investment Research
Valuation – CAPE Ratio of Major Developed Market Equities U.S. equities are at significantly higher valuations than international equities. Image: Deutsche Bank
2020 Stimulus as % of GDP – Emerging Markets vs. Developed Markets The 2020 stimulus is massive, especially in developed markets Image: BofA Global Investment Strategy
Emerging Market Equities vs. Developed Markets Equities Emerging market equities have underperformed their developed market counterparts. Image: Credit Suisse Research