Schroders Equity Lens January 2024: your go-to guide to global equity markets

Key highlights include:

• Japanese and European companies have grown earnings at a similar/faster rate than the US over the past decade. US market outperformance has been driven by rising valuations and a strong dollar (slide 5 and 6)
• Global equities rallied 15% in the last two months of 2023, the tenth highest two-month return for MSCI World since 1969 (slide 7)
• US retail investors started 2024 in bullish mood. But this can be a contrarian signal. Late December sentiment reached a level which has historically preceded poor returns (slides 8-9)
• The Super-7 rose 76% in 2023, the rest of the world 16%, although more recent performance has favoured “the rest”. They now make up more of MSCI ACWI than Japan, UK, China and France combined (slide 10-11)
• Deviating from the market has been a winning strategy when concentration has been high. The tables could be set to turn in favour of more actively managed strategies at last (slide 12)
• Non-US markets and small caps (US and international) trade on cheaper valuations (slides 13, 25-26)

The full report can be downloaded here...