International ETFs: Is It Time for Global Market Resurgence?

The Underperformance of International Markets

• 🌍 For a multi-year period, international markets were a "terrible bet" compared to US investments.
• 🇺🇸 This year, the S&P 500 has surprisingly been the worst-performing market, underperforming both emerging and developed international markets.

Factors Influencing Market Performance

• 📉 A significant factor in the S&P 500's underperformance is the US dollar being down more than 10%.
• 🏦 There's a trend of European and UK entities redomiciling retail and retirement assets, shifting away from US investing.

Nuances of International Investing

• 🏠 While international diversification is beneficial, especially for those with "home bias" (100% US invested), it's cautioned against abandoning the S&P 500 entirely.
• 📊 International markets, particularly outside the US, are dominated by SMID (small and mid-cap) companies.
• 🇺🇸 The US market is unique due to the presence of large, globally recognized companies like Meta and Palantir, often referred to as "uniquely American businesses".

Strategic International Exposure

• 🧩 Investing in European markets might be considered "cheap beta" or a factor bet rather than a bet on US exceptionalism ending.
• ⚠️ Making a tactical mistake could be assuming the end of US exceptionalism and heavily investing in markets like Germany, which lack comparable large-cap tech companies.