Searching for value, growth and diversification, investors continued to push up international equities in April, 2025. As viewed on May 1st, the MSCI ACWI ex US index was up 4.55% for the month, while the comparable US index was down 0.51%.
Uncertainty over the impact of evolving tariffs on inflation and consumer spending fomented disquiet in US equities. This was reinforced when several companies, such as GM, UPS and Heinz, changed or dropped 2025 earnings guidance. Adding insult to injury, The Bureau of Economic Analysis released data indicating that GDP declined 0.3% in the first quarter – the first decline in three years.
Outside of the US, almost every developed market showed positive returns for April. Appreciation for increased spending, especially on defense, apparently continued for investors in developed and emerging European equities. Returns in many of those markets were enhanced by the weaker dollar for US domiciled investors.
Emerging market performance was more varied elsewhere. Chinese equities suffered from the trade wars with the US and weaker domestic demand. At the same time, reduced tariff risks, accommodative monetary policy and good economic growth attracted foreign investment in India. Small Asian markets, highly dependent on exports, also seemed to benefit from changes in the outlook for tariffs. South American and Middle Eastern emerging markets had varied performance.
Can international markets in aggregate continue to outperform? Between fluctuating tariffs, ongoing wars and investor unease – there is too much uncertainty to say. Global equity indices are comprised of countries, that in turn, include multiple sectors, industries and companies that are influenced by macro factors and their own idiosyncrasies.
Whether investing domestically or internationally, at Bastion Fiduciary your portfolio managers look through they eyes of our individual investments while digesting the vagaries of the macro environment and looking for value. As many international equities are still trading at significant discounts to their US peers, we still see opportunity in equities abroad.
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