Despite threats of tariffs and saber-rattling over Greenland, international equities continued their run in January. In US dollars, MSCI’s ACWI-EX US index was up 5.99% in January, continuing to outperform its US representative index, which returned 1.29%. Some of the good returns in international indices were due to the fall in the US dollar, which reached a four- year low late in the month.
All major developed market indices were in positive territory for the month. Improved economic outlook and strong corporate earnings, especially among technology companies, were credited for the rise in the developed MSCI Europe index of 4.46%. ASML, a leader in lithography systems and the largest member of the index, was up over 30%.
MSCI’s Pacific index was up 6.69%. All composite markets were up, even heretofore unloved New Zealand. Positive market sentiment, AI interest and IPO performance pushed the Hong Kong index up 10.34%. Japan, the largest constituent index, was up 6.59% as investors appreciated improving corporate governance, good earnings outlook and a new economic stimulus package.
President Trump’s threats to throw tariffs on aircraft made in Canada impacted the country’s aviation stocks but the index still eked out a 1.17% return due to strength in the energy and materials sectors.
MSCI’s emerging market index was up 8.86% for January. Increased geopolitical stability and surges in commodity prices contributed to a rise in the Latin America index of 15.35%. Commodity prices, along with the prospect of peace negotiations, also drove the European Emerging Market index, which was up 12.35%. Continued interest in AI-related stocks drove many Asian markets – the index was up 8.28%, despite the tariff cloud that hung over Indian Stocks.
It’s impossible to predict, but as the US turns more inward, it is likely that investors will look to international equity markets and other asset classes to balance their exposure to US equities – especially the concentrated S&P 500.
In addition to investing in our international equity portfolios, we hope you consider our Bastion Energy and Bastion Industrial and Infrastructure Portfolios to round out your equity exposure.
1 Unless otherwise noted, performance numbers for January, 2026 are based on the relevant MSCI index data viewed on February 2, 2026.
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