Global stocks increased for the quarter as the All-Country World Index ETF (ACWI) gained +4.38% from July through September. The ride has been far from steady, however. Protectionism and politics are driving daily news feeds and adding to the market unsettledness.
The dichotomy between U.S. stocks and non-U.S. stocks has become more apparent since the beginning of the summer and evidenced in the chart below. The blue line is the S&P 500 ETF (SPY) and the orange line is the Non-US Stock ETF (ACWX). Concern surrounding emerging market growth rates has created a difficult environment for their stock markets. Further, rising U.S. rates are pressuring liquidity in markets that have high sensitivity to inflows and outflows, such as smaller and less-developed countries. In the long run, this divergence should not derail investor allocations to non-U.S. areas.
Cory Nakamura CFA, CFP®
Chief Investment Strategist
Mosaic Pacific Investment Advisors | Honolulu, Hawaii
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