Total return figures reflect the reinvestment of dividends. Volatility is calculated using the standard deviation of returns and shown as a rolling 3 or 5 Year annualized standard deviation. Volatility measures the extent to which returns vary over time. What are the risks of staying concentrated in the U.S.?

Frequently Asked Questions About Non-us Stocks

• The Equities team utilizes all the tools at its disposal to form a low-cost and well-diversified portfolio of stocks that outperforms the benchmark on a risk-adjusted basis over long time periods.
• The MSCI World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance.
• “Expected” or “alpha” return estimates are subject to uncertainty and error.
• It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested.
• The first thing to notice is that the diversified portfolio has the lowest standard deviation, which means that it is less volatile than investing in either US stocks or global stocks alone.
• They offer unique perspectives and often use different strategies than what’s used in PERA’s internal portfolio management process, thus offering the opportunity to diversify the return to the overall asset class .

Second, the sample used in the previous analysis pits global equities against an extremely impressive period of US equity returns. If you break out annualized returns by decade, you can see that periods of outperformance and underperformance for global equities have always been part of the deal. To avoid these inadvertent risks and performance gaps, we think it’s imperative for investors to monitor their allocations. Take, for example, a global equity portfolio that is benchmarked to the MSCI All Country World Index (ACWI).

The largest of these stimulus measures is a plan passed by Germany that allows for potentially unlimited borrowing for defense spending, while creating a €500bn 10‑year fund to drive infrastructure investments. For 2025 and 2026, however, the MSCI EAFE Value Index is forecast to see 7.9% and 9.2% earnings growth, respectively. Earnings growth for the MSCI EAFE Value Index was particularly strong in 2022, with a 12.4% earnings per share growth besting both the S&P 500 Index and the MSCI EAFE Growth Index. Past performance is no guarantee or a reliable indicator of future results.

The Equities team achieves its diversified investment portfolio by using a combination of active and passive management strategies. By relying on internal equity asset management, PERA saves tens of millions of dollars in external manager fees every year. Broadly defensive positioning had successfully mitigated downside risk but contributed toward negative relative returns. Over time, global investing has improved diversification for disciplined investors, and we believe allocations should be maintained despite recent underperformance and the troubling outlook. Global equities currently have a negative annual return, which history says could be a precursor to outperformance in the next five years.

How We’ve Helped Investors Navigate 20 Years Of Market Ups And Downs

The dataset for the MSCI World ex-US Index goes back to 1970. Diversification doesn’t work when you deviate from the client’s long-term investment plan. You know your client’s portfolio is properly diversified when there is always a portion of it you hate. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams.

Portfolio Managers

In a world where the performance differentials can be +/-10% in a given quarter, seemingly small differences in allocation can matter a lot, and investors can’t afford to take unintended bets. Customized overlays for institutional risk management These regional allocations may be historically correlated over the long term, but they can experience wildly different returns in discrete periods.

Investing involves risk including possible loss of principal. Current performance may be lower or higher than quoted.

Gmo Small Cap Quality Fund Class Vi

The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. There’s also a strategic asset allocation case to be made to diversify international large‑cap equities in a more balanced manner. Mitigating this, however, are the ongoing and significant risks emanating from the global tariff war and its impact on  potential recession scenarios.

Liquid Markets

Please refer to the Disclosure page on our website for important information about investments and risks. A more Everestex review tailored use of overlay programs focuses on more granular allocations within or intra asset classes, aiming to control for risks such as regional misalignments. All investments are subject to risks, including the risk of loss.

• Because of the inherent limitations of all models, potential investors should not rely exclusively on the model when making a decision.
• The Global Equity asset class includes publicly traded stocks in companies based in the United States and abroad.
• All investments are subject to market risk, including the possible loss of principal.
• The portfolio was allocated on a regional basis to a variety of active and passive strategies, with some significant country and sector tilts (versus benchmark) that had not been rewarded.
• Tech has been the engine of U.S. stock performance over the last several years, and much of the market’s gains have come from a handful of prominent tech names.

Performance (%)

As regional misalignments risk significant performance deviations amid trade uncertainty, let’s look at how overlay management can potentially help to guide global equity portfolios. Customized overlay solutions like managing regional equity allocations may help to maintain a portfolio’s desired risk and return characteristics and reduce the potential risks presented by uncertain market environments. On the active management side (about 68% of Global Equity assets), the investment professionals on the Equities team assess, buy, and sell stocks in an effort to exceed benchmark returns.

• We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view.
• Since 1970, U.S. and global markets have traded turns in leading performance.
• The Institutional Class Z has the lowest expense ratio of the available share classes but requires the highest minimum investment and is not accessible to all investors (see Prospectus).
• Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
• Global Equity is a primary driver of investment returns over the long term, in addition to providing liquidity to the portfolio.

Global Equity Portfolio

• Performance may be volatile, and investors could lose all or a substantial portion of their investment.
• Current performance of the Portfolio may be lower or higher than the performance quoted.
• Diversifying equity exposures across size, style, and geography seeks to enhance performance consistency, which, in turn, could help to lower portfolio volatility.
• Such risks may be magnified for securities in frontier emerging markets.

Please consult your professional advisers if you have questions about a particular investment or are unsure of the laws and regulations applicable to you. It is not investment advice, nor is it intended to be relied on as a forecast or research and does not constitute an offer, recommendation or solicitation to buy or sell shares in any Fund. Unfortunately, this investment is not available for the investor type and location you have selected. Click “Continue” to visit the pages for Harding, Loevner Funds, Inc., a familyof mutual funds for US investors. This material is provided for general informational purposes only and is not intended to provide legal, tax, or investment advice. This material is provided for general and educational purposes only and not intended to provide legal, tax, or investment advice.