Tuesday, June 22, 2021; 12:00 - 1:00 pm
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Many U.S. investors are underexposed to international equities. There are several reasons for this including familiarity bias, a long stretch of underperformance relative to U.S. stocks, misconceptions about inherent risk, and perceptions about diversification. Harbor believes that these views may be misguided or overstated, and a strategic allocation to international equities offers significant benefits.
From a diversification perspective, international stocks offer exposure to a greater variety of economic forces than domestic stocks; Non-U.S. markets have very different sector and market-cap compositions and are exposed to different factors. While correlations between U.S. and non-U.S. stocks have trended higher recently, they have varied considerably over time, and there are economic forces that could potentially push correlations lower in the future. International stocks may also provide a way to increase your portfolio’s yield. Finally, skilled active managers have had more success in international markets than in the U.S. and some passive strategies may court more risks now including heightened concentration, overvaluation, and dividend cuts.
Join Sonya Morris, Managing Director at Harbor Capital for a robust discussion and actionable insights to help manage your strategic allocation to international equities.
1 CFP CE approved