Current global economic growth is likely to continue as structural reforms in Europe and Japan spur fundamental changes in those economies, along with rebounds in emerging markets.
That expected growth means international markets are likely to outperform the U.S. markets, which have seen an extended period of growth since the 2008 financial crisis, said participants in a conference call sponsored by BlackRock on Friday.
International markets are already outperforming the Standard & Poor’s 500 stock index this year, with exchange-traded funds such as the Vanguard FTSE All-World ex-US ETF (VEU), the largest international ETF by assets under management, up 23.6 percent year-to-date, while the iShares MSCI ACWI ETF (ACWI) has gained 20 percent. Meanwhile, the SDPR S&P 500 ETF (SPY) is up 16.1 percent.
The structural reforms by Japanese Prime Minister Shinzo Abe are taking hold, Europe’s recovery is broader, and as global trade has improved export-driven economies in emerging markets are benefitting, participants said, citing just a few reasons why they think international markets will continue to outperform.