Active ETF investing has had a big year so far, but it can still play a big role in closing out 2023. International equity ETFs can really benefit from active investing. With a strong case for international equities brewing, now may be the time to look closer.
Why look abroad for equities right now? The market seems to be shifting, especially as the U.S. rate cycle appears to be ending. The dollar has strengthened considerably while the Fed has pushed rates up, impacting foreign markets. An end to those hikes and perhaps even future cuts on the horizon could boost the case for foreign equities.
What’s more, in the U.S., the impact of those hikes looms over the economy. Rate hike impacts tend to lag the initial rise by a few months, with lending particularly slow at digesting hikes. Along with a still top-heavy, expensive S&P 500, may see U.S.-based investors begin to look abroad.