With less than two months left in 2023, this maybe another disappointing year for broad-based ex-US developed market equity funds. This includes a slew of passive exchange traded funds.
That extends a lengthy stretch in which ex-US developed market equity gauges, such as the MSCI EAFE Index, have trailed the S&P 500. As a result, many U.S. investors aren’t rushing to examine international opportunities. Perhaps they should. This is particularly true at a time when valuations in the asset class are low and some equity markets outside the U.S. are rallying.
Of course, selectivity is key and that objective can be realized with the Calvert International Responsible Index ETF (CVIE). CVIE, which tracks the Calvert International Responsible Index, employs an environmental, social, and governance (ESG) overlay, which speaks to selectivity. Fortunately for investors considering international developed market exposure, the Calvert ETF has other fine points.
CVIE Relevant Today
Many market participants aren’t rushing hand over fist into ex-US developed market stocks. CVIE’s quality attributes are enhanced when many central banks may be forced to keep interest rates high or raise borrowing costs.
“We see regional stock markets facing diverse policy, inflation and growth prospects – affecting corporate earnings,” noted BlackRock. “That variety is reflected in the wide dispersion in excess compensation investors receive for the risk of holding stocks over bonds – or earnings yield minus bond yield – in different DMs. That divergence creates opportunities to be selective, in our view.”