The quiet change

The US equity market has dominated the rest of the world over the last 15 years. According to strategists from BofA, 100 USD invested in the US stock market in March 2008 have grown to 288 USD today, while 100 USD invested in Global Stocks ex US stocks are down to USD 98. We note however that something appears to be quietly changing over the last months. European stocks have been outperforming the US by 6% in local currency since Summer last year. Adjusted for currency, the outperformance even grows to 12% since July. Drivers are well identified: relative valuation in a rising interest environment, falling oil and gas prices and lately early indications of peaking CPIs. We are confident that this is only the beginning and our portfolios are positioned for this change.