MARKET INSIGHTS: MIND THE GAP - DIVERSIFYING ACCROSS COUNTRIES
While many of us enjoy an international holiday this summer it might be timely to talk about countries!
Recently, there’s been a lot of noise around which country one should invest their savings in for the best growth, and the idea of allocating away from the US for many reasons. In the first half of 2025, developed markets outside the US returned 19.0%, outperforming the US and emerging markets. But that outcome masks the wide range of returns across individual countries, from Spain’s 43.0% to Denmark at −5.5%. This kind of dispersion isn’t unusual—it’s a defining characteristic of global investing.
On average, the difference in return between the best- and worst-performing country
exceeded 43% over the past 10 calendar years. It’s no wonder investors may be tempted to chase recent winners or try to avoid losers. However, there’s little evidence that timing strategies consistently pay off. Country returns can turn quickly. For example, Canada posted the worst returns in 2015, down over 24%, but was the top performer in 2016, up over 24%. An investor who lost patience at the end of 2015 potentially missed out on the subsequent market recovery.
Country volatility is a normal part of global investing. Fortunately, as 2025 illustrates,
investors in a globally diversified portfolio can benefit from international diversification
without risking getting on the wrong side of country swings.
In USD. The US is included in the developed markets analysis. MSCI data © MSCI 2025, all rights reserved. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Diversification neither assures a profit nor guarantees against a loss in a declining market
Risks : Buying Investments can involve risk. The value of your Investments and the income from them can go down as well as up and is not guaranteed at anytime. You may not get back the full amount you invested. Information on past performance is not a reliable indicator for future performance. This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security. The views expressed here are subject to change without notice and we can’t accept any liability for any loss arising directly or indirectly from any use of it.
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