403(b) Curriculum Library


Chart of the Month: U.S. Equities Continue to Outpace Foreign Developed Markets

Market Observations:

U.S. equities have substantially outpaced foreign developed markets, with the relative performance gap reaching an extreme. Some of the factors behind the recent outperformance can be attributed to the superior performance of the U.S. economy relative to the rest of the world, share buy-backs, and the growth-heavy weight of technology stocks (e.g., FAANG stocks - Facebook, Apple, Amazon, Netflix, Google) in the S&P 500 index. This trend has likely been great news for retirement plan participants, who traditionally have a heavier allocation to U.S. stocks in their portfolio. However, given the relative performance of U.S. stocks is at its highest level in history, it may be worthwhile for investors to consider rebalancing back to a long-term asset allocation target or increasing the overall international exposure.

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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