Rethinking US equity exposure as valuation premiums persist

For over a decade, US equities have commanded a valuation premium over non-US markets, underpinned by superior earnings growth, strong free cash flow, and dominant large-cap technology firms. However, as return on equity trends stabilise and market expectations around AI-driven profitability shift, investor confidence in sustained US outperformance is waning. At the same time, improving economic momentum and favourable interest rate conditions are bolstering non-US markets, particularly in Europe, where financial stocks are seeing a notable valuation rebound. Read the full article to explore...