Higher returns – higher multiples

Since the financial crisis in 2008, US companies have managed to constantly increase their competitiveness against the businesses located in other developed countries. Return on equity for the MSCI US is currently 5.5% higher than the one for MSCI AC World ex US. There are many reasons for this, one being that the US index carries more technology companies with higher return on equities. That said, it partly justifies the higher multiples paid in the stock market for the US ( see the Price-to-Earnings Gap ).