There are many reasons to invest beyond U.S. borders. Some of the most commonly cited:
- Home country bias means U.S. portfolios are underallocated to international opportunities.
- Global stocks have cheaper valuations than U.S. counterparts.
- Economic and company growth prospects can be greater outside the U.S.
The third point is what Fundamental Equities portfolio manager and active stock picker James Bristow encapsulates in one word particularly well suited to post-pandemic life: excitement. The type of excitement he refers to is the innovation and dynamism that is driving strong company earnings across sectors and around the world ― a great share of which is outside the U.S.
Mr. Bristow has been at the helm of the the BlackRock International Fund for 14 years, successfully weathering multiple business cycles, including the 2008 Global Financial Crisis and the ongoing COVID-19 pandemic.
As vaccines pave the way to broader economic reopening and recovery, Mr. Bristow is eyeing up what he sees as significant investment potential. While markets globally have come a long way and many recovery stories are already built into pricing, Mr. Bristow and team are looking for companies that have not yet priced in their full potential or those poised to emerge from the COVID crisis even stronger than they were before it.
Where does optimum excitement reside? Mr. Bristow takes a company-by-company approach to arrive as his high-conviction ideas, but he offers three themes for consideration in the current environment: