Despite ongoing Middle East conflicts, a pullback in AI stocks and fears of stubborn inflation, the MSCI ACWI (All Country World Index) ex USA Index returned a positive .37% for the month of July, 2026 and 14.43% year-to- date (January 1, – July 31, 2926). The representative MSCI USA index was down .06% for July and up 10.01% year-to-date.
The relevant developed international MSCI index was up 2.08% for July. The European regional index returning a positive 1.62%, albeit with great dispersion among its members. Led down by the lithography systems maker ASML, the Netherlands fell 9.44%. Nokia, the largest component of the Finnish index, reported a disappointing 2nd quarter and pushed its country index down 4.97%. Some investors rotated into the energy-heavy Norway index, which rose 11.55% The UK, a much more prominent European component, rode the appreciation of energy and mining stocks and rose 5.32%. Year-to-date, the developed MSCI European index was up 10.09%.
Elsewhere in developed markets, the Canadian index was up 2.87% for the month as it benefitted from good reports from financial companies and domestic technology companies. Developed Asia was a mixed bag. Despite heavy technology exposure, the Japan index eked out a 1.03% return. Bargain hunting was one reason credited for the 10.87% rise in the Hong Kong index. Considered a regional safe haven with a strong banking sector, MSCI’s Singapore index was up 10.32% for July. Year-to-date the MSCI’s developed World ex USA index was up 11.85%.
Down 3.03%, MSCI’s EM (Emerging Markets) index didn’t fare as well as its developed counterpart in July, and its constituent regions displayed huge dispersion. The technology heavy Korean and Taiwan indices did an about- face and fell 17.11% and 5.29%, respectively, thus contributing to a decline in the EM Asia index of 4.17%. On the other hand, the financial heavy EM Europe index was up 6.14%. With a top ten dominated by materials, financials and energy companies, MSCI’s Latin American index was up 4.94% for the month. Year-to-date MSCI’s EM index is up 20.27%.
At the beginning of July, Andrew Slimmon, Managing Director at Morgan Stanley, wrote the following:
To be clear, we would not advocate moving equity exposure completely out of the US, but a smattering of US, European and Asian stocks just might outperform a US-only approach. For the second year in a row.
I believe this still holds true at the beginning of August.
Disclaimer: This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns. Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost. All statements made regarding companies, securities or other financial information contained in the article are strictly beliefs and points of view held by Bastion Fiduciary and are not endorsements of any company or security or recommendations to buy or sell any security.