Five Forces in International Equities Investors May Be Underestimating

Key Insights

• A range of market dynamics are in play that are having long‑term impacts on performance that may surprise some investors.
• Closer attention is warranted on the longer‑term potential of China as an investment market, Japan’s often unheralded structural changes, technology opportunities beyond the U.S., and the prospects for value in emerging markets.
• As 2021 progresses, understanding these dynamics can help investors identify or amplify potential sources of return for their international portfolios.

The Five Forces in International Equities to Monitor

(Fig. 1) Key themes shaping the direction of international markets

International investors appear to be underestimating five global trends that have the potential to shape the direction of markets. These areas of focus—China, Japan, technology, value, and the resiliency of international markets—may provide distinct opportunities as investors seek to shape portfolios in the wake of the coronavirus pandemic.

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