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US equities have been on an extended run, outperforming international equities in eight of the last 10 years and delivering an annualized outperformance of more than 8% during the past decade.1 But, over the long term, market leadership is usually cyclical, so we think it’s worth maintaining a meaningful allocation to equity opportunities outside the US. In addition, the exposure many US investors have to non-US equity markets is through passive strategies. But the inefficiency of international markets and the track record of active managers demonstrate the potential value of keeping at least a portion of a portfolio’s international allocation with a manager who seeks to exploit the opportunities and effectively mitigate the risk these markets present.

Following are seven reasons why investors may want to take a closer look at their current equity allocations and consider whether they’re properly positioned for the opportunities that could arise in a changing global economic climate.


1 Past performance does not guarantee future results. Investors cannot directly invest in indices. US Equity is represented by the S&P 500 Index, which returned 12.03% excluding dividends over the past 10 years. International Equity is represented by MSCI World ex USA Index, which returned 3.83% over the past 10 years excluding dividends. Data Sources: Schroders, MSCI, Refinitiv Datastream. 
2 Source: The Callan Database Group.
3 Source: “Stock Exchanges Around the World,” Investopedia, 1/31/24.
4 Excluding OTC stocks and based only on companies that trade on exchanges.   Source: “America has lost half its public companies since the 1990s. Here’s why,” CNNBusiness.com, citing the Center for Research in Security Prices, 6/9/23.
5 Source: JPMorgan
6 Source: JPMorgan
7 Based on the returns for the constituents of the MSCI ACWI Index as of 12/31/23.
8 Based on the calendar year returns for the MSCI ACWI Index for the past 10 years sorted by constituent performance for the top 10 best-performing stocks, as of 12/31/23.
9 Source: eVestments, as of 12/31/23. Based on total institutional assets under management within the eVestment non-US Equity universe.

Important Risks: Investing involves risk, including the possible loss of principal. • Foreign investments may be more volatile and less liquid than US investments and are subject to the risk of currency fluctuations and adverse political, economic, and regulatory developments. These risks may be greater, and include additional risks, for investments in emerging markets or if a fund focuses in a particular geographic region or country. • Small-cap securities can have greater risks, including liquidity risk, and volatility than large-cap securities.

The views expressed here are those of the author. They should not be construed as investment advice. They are based on available information and are subject to change without notice. This material and/or its contents are current as of the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Hartford Funds. 

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Insight from sub-adviser Schroders Investment Management
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Investment Director, Global and International Equities

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