Global Investors Shift Focus to Non-U.S. Value Stocks Amid U.S. Market Strains
Global investors are increasingly turning their attention to non-U.S. value stocks as U.S. equities face fiscal strains and valuation concerns. Despite record-high S&P 500, American growth funds saw significant outflows, while investors look overseas for stability and favorable valuations in value and small-cap equities.
Global investors are pivoting towards non-U.S. value stocks, fund managers reveal, due to concerns over stretched U.S. market valuations and fiscal pressures. Despite a record high in the S&P 500, over $152 billion has been withdrawn from U.S. growth funds this year, according to LSEG data from September.
Outside the U.S., value and small-cap equities highlight attractive fundamentals such as strong earnings and better margins, sparking interest from asset managers who oversee trillions of dollars. Sebastien Page of T. Rowe Price states that non-U.S. value stocks offer appealing valuations for investors seeking stable income and mature sector exposure.
Meanwhile, growth stocks like the S&P 500's 'Magnificent Seven' maintain rich valuations, attracting those ready to endure short-term volatility for long-term gain. Divergences in value-growth performance by region are evident, with value leading overseas compared to growth's dominance in the U.S.
(With inputs from agencies.)
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