As Private Market Secondaries Soar, Investors Must Demand Discipline

Past performance is not indicative of future results. Isolating an example of the S&P 500® Index relative to the MSCI EAFE Index, let’s consider the quarterly performance differential over the past 20 years, with events in the 95th percentile highlighted in green. This reshaping of global trade policy may affect individual economies unevenly.

Learn how we can help investors implement systematic strategies like trend following within an overlay program. These views are subject to change at any time based upon market or other conditions, and Parametric and its affiliates disclaim any responsibility to update such views. Such an unlikely occurrence vividly illustrates the potential impact that regionally misaligned portfolios can have.

Key Factor Supporting International Value: Earnings Growth

Over the last three years, relative earnings growth has changed hands and favored growth equities—another argument for a broadly diversified portfolio exposure. We analyzed rolling three‑year returns and the relative performance of the MSCI EAFE Value Index and the MSCI EAFE Growth Index since January 2000. Diversifying equity exposures across size, style, and geography seeks to enhance performance consistency, which, in turn, could help to lower portfolio volatility. The Equities team utilizes all the tools at its disposal to form a low-cost and well-diversified portfolio of stocks that outperforms the benchmark on a risk-adjusted basis over long time periods.

Performance (%)

Please consult your professional advisers if you have questions about a particular investment or are unsure of the laws and regulations applicable to you. It is not investment advice, nor is it intended to be relied on as a forecast or research and does not constitute an offer, recommendation or solicitation to buy or sell shares in any Fund. Unfortunately, this investment is not available for the investor type and location you have selected. Click “Continue” to visit the pages for Harding, Loevner Funds, Inc., a familyof mutual funds for US investors. This material is provided for general informational purposes only and is not intended to provide legal, tax, or investment advice. This material is provided for general and educational purposes only and not intended to provide legal, tax, or investment advice.

Strategy

Building an investment portfolio to meet your client’s long-term goals is all about trying to earn the highest return for a given level of risk. Investors who chased performance and made significant shifts in their allocations following the global equity outperformance have recently been burned. It wasn’t that long ago that everyone seemed to hate US stocks and wanted to increase their allocation of global equities (particularly emerging markets). It’s tempting to criticize a strategy based on recent performance, but using global equities as part of a diversified portfolio still makes sense.

How Much Of Your Portfolio Should Be In Non-us Stocks?

You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. J.P. Morgan Asset Management’s Long-Term Capital Market Assumptions suggest developed international stocks may produce better annual returns than U.S. equities over the next 10 to 15 years. While international equities have lagged U.S. stocks over the intermediate and longer term, Everestex trading platform there may be an opportunity for international stocks to demonstrate better performance and diversify investor portfolios.

• As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
• Sharpen your knowledge with the latest wealth engagement news, market commentary and planning education.
• While these numbers aren’t predictions, they’re helpful data points based on assumptions about earnings, valuations, currency shifts and dividends.
• It’s important to consider tax and investment implications of holding or exercising your options.
• It should not be assumed that investment in the securities identified has been or will be profitable.

You Are Currently Logged In To Multiple T Rowe Price Websites

The Equities team achieves its diversified investment portfolio by using a combination of active and passive management strategies. By relying on internal equity asset management, PERA saves tens of millions of dollars in external manager fees every year. Broadly defensive positioning had successfully mitigated downside risk but contributed toward negative relative returns. Over time, global investing has improved diversification for disciplined investors, and we believe allocations should be maintained despite recent underperformance and the troubling outlook. Global equities currently have a negative annual return, which history says could be a precursor to outperformance in the next five years.

• Morgan advisor to learn more about how to better position your portfolio for potential global market shifts.
• With the IPO market in Europe at a standstill, most companies will exit via mergers and acquisitions.
• Investing entails risks, and there can be no assurance that Parametric (and its affiliates) will achieve profits or avoid incurring losses.
• Over the last three years, relative earnings growth has changed hands and favored growth equities—another argument for a broadly diversified portfolio exposure.

Bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice.

Please refer to the Disclosure page on our website for important information about investments and risks. A more tailored use of overlay programs focuses on more granular allocations within or intra asset classes, aiming to control for risks such as regional misalignments. All investments are subject to risks, including the risk of loss.

Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. Realizing these growth projections would provide a notable performance catalyst given the low level of starting valuations. Index performance is for illustrative purposes only and is not indicative of any specific investment. During more positive rate environments in which the ECB policy rate was greater than 0.50%, the forward one‑year excess return for value versus growth was an impressive 4.40%. Interest rate policy from the European Central Bank (ECB) is another dynamic that may favor international value versus growth.

It is a commonly used benchmark for institutional investors like PERA and is designed to capture 99 percent of the global equity market. Colorado PERA’s investment team, guided by the PERA Board of Trustees’ investment policies and strategic asset allocation, invests plan assets with the primary goal of achieving the best risk-adjusted returns for members. A Middle Eastern endowment sought to overhaul its several-hundred-million-dollar global equity allocation following a decade-long period of underperformance versus the global equity benchmark (Dow Jones Islamic Market World).

• You know your client’s portfolio is properly diversified when there is always a portion of it you hate.
• Certain custody and other services are provided by JPMorgan Chase Bank, N.A.
• Is now a good time to add international equities?
• Net returns are gross returns less effective management fees.
• While the Portfolio is “no load”, management fees and expenses will apply.
• Do international stocks come with more currency risk?

Content

• Pimco Footer
• Long-term Investment Strategist, Co-founder
• Monetary Policy In A Time Of Transformation
• Risks Of Ai Trading
• Part One: Ai’s Economic Revolution

Widespread AI adoption will very likely lead to dramatic and sometimes difficult changes in the way many of us work and live, but the long-term benefits could be even more dramatic. In the longer run, I expect AI will boost productivity and living standards, and it may even lead to new discoveries. ConclusionIn conclusion, I expect that AI will have a transformative effect on the economy and affect a large share of workers in ways that will challenge the ability of the private and public sectors to accommodate this adjustment. I have noted that my base case foresees labor market disruptions as relatively short term, even if painful. As I noted earlier, it will be important for society to deal with the consequences of any structural changes in the economy because of AI, and policies beyond the purview of the central bank would certainly be needed to address a structural rise in the natural rate of unemployment. Moreover, some components of the labor market may face structural changes, while others may not. newlineWhereas technological progress has historically favored occupations with higher wages and education requirements, one paper shows that AI has the potential to reverse this pattern, automating higher-paying information-based jobs while increasing relative demand for lower-paying jobs and those requiring less education, thus reducing aggregate wage inequality.33

Third, while we are not opining on the outlook for Nvidia’s shares, a couple of examples from the dot com era suggest what could conceivably happen to touted “winners” in the stock market after a bubble eventually burst. Of course, the adverse effect of tight monetary policy on economic growth could prevent a bubble from inflating. And we expect the stock market in general to rally, as the bubble inflates, like it did during the second half of the 1990s. High-frequency trading and the increased role of social media in influencing market moves also mean that markets tend to move faster these days than they used to. The dot-com bubble lasted at least five years, with then-Fed Chairman Alan Greenspan warning about “irrational exuberance” in the stock market almost four years before it burst.

Data mining is the practice of compiling and analyzing massive volumes of data to identify trends and patterns. Strategy builders are AI tools that investors can train to follow their own rules. AI signals are pre-programmed to send automatic alerts when they discover stocks that meet specific requirements.

Other Types Of Ai Trading

• AI-related stocks, particularly United States, have done astoundingly well over the past several years.
• For example, Korea was able to replicate technology from Japan when developing its heavy industry in the 1970s and repeated the trick with the growth of the digital TV market in the 2000s.
• A record proportion of the U.S. stock market trades at over 10 times sales; AI-enabled surveillance company Palantir trades at over 100 times sales.
• AI trading can cut research time and improve accuracy, predict patterns and lower overhead costs.
• For some types of application software, agent orchestration could shift engagement and value capture over time, particularly for products that function as lightweight user interfaces and where the business model is monetized predominantly through seats or user licenses.

The stock of Edison Electric round-tripped from under $200 in early 1879 to over $3,000 in 1880 and back below $200 the following year. When the bubble eventually pops, earnings contract along with valuations. The lenders got to book sales and profits up front, but later were forced to realize losses when their customers defaulted. It is hard to think of a significant bubble that hasn’t involved a sizable bezzle. And it now seems plausible, thanks to DeepSeek and other new Chinese entrants into the field, that AI will not be a monopoly, but may even become a commodity product—like internet broadband and mobile telephone services are today.

• There is no guarantee that the principal amount of the investment will be preserved, or that a certain return will be realized; the investment could suffer a loss.
• Since PIMCO Europe GMBH services and products are provided exclusively to professional clients, the appropriateness of such is always affirmed.
• The US, which saw far by the biggest gains from ICT developments, is estimated to have enjoyed an average boost to annual productivity growth between 1995 and 2005 of 1.5 ppts.​
• At the same time, demand for capital would rise because of the strong business investment required to take advantage of the technology, putting upward pressures on interest rates, and household savings could fall due to expectations of stronger real wage growth and thus higher lifetime earnings, also putting upward pressure on interest rates.

Ai Data Limitations: Better Data Mean Better Outputs

He began his investment career as an economist with Royal Dutch Shell. He is the Chairman of the GMO Board of Directors, a partner of the firm, and has also served on the investment boards of several non-profit organizations. Mr. Grantham co-founded GMO in 1977 and is a member of GMO’s Asset Allocation team, serving as the firm’s long-term investment strategist.

Pimco Footer

By responding to market forces in real-time, AI models reduce the time investors need to spend researching. Around this time, high-frequency trading models used machine learning to exploit small inefficiencies across markets by executing thousands of trades per second. Despite the recent solid gains in AI-related stocks, we think tremendous financial and economic benefits have yet to be realized from the technology. To understand the impact of AI on software companies, investors should take a closer look at differences in business models, end markets, and how well a product or platform delivers actual AI capabilities, according to Goldman Sachs Research.

Long-term Investment Strategist, Co-founder

This aligns with our view from last year, but we now see clearer near-term risks to the thesis of rapid institutional, deeper trade integration. Of course, those come with an enforcement risk just given the lack of congressional backing. We expect incremental steps by Mexico to reduce trans-shipment risk and better align with U.S. trade priorities, though likely without a fully institutionalized enforcement mechanism by mid-2026.

Monetary Policy In A Time Of Transformation

This material is being furnished for informational and/or marketing purposes only and does not constitute an offer, recommendation, advice, or solicitation to sell or buy any security. Outside of the United States, this is intended for investment professional use only. Forecasts are based on subjective estimates about market environments that may never occur.

Risks Of Ai Trading

The services provided by PIMCO Europe GmbH are available only to professional clients as defined in Section 67 para. Since PIMCO Europe Ltd services and products are provided exclusively to professional clients, the appropriateness of such is always affirmed. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Bond investments may be worth more or less than the original cost when redeemed. Everestex trading platform I think the playbook has to be different than the playbook that investors have utilized over the last decade or so.

At this point the pace of improvements and rollouts slows, causing productivity gains to taper off. There are generally considered to be three classic examples of GPTs, all of which had profound economic effects. Most importantly of all, we show how AI is something that all investors need to prepare for. In a recent survey, almost 80% of our clients told us artificial intelligence (AI) would have a transformative effect on the global economy. See Daron Acemoglu (2025), "The Simple Macroeconomics of AI," Economic Policy, vol. One warning sign that the speed of adoption may not match the speed of AI infrastructure deployment is in what some firms are reporting about the depreciation of their investments.

• They have the data, the necessary talent and deep industry expertise to develop solutions that individual companies might find hard to achieve independently.
• AI has the potential to boost innovation across a very wide range of fields, from drug discovery to education to transport.
• This could help to offset upward pressure on nominal bond yields from any rise in real yields.
• We argued above that the effects of new technologies cannot be realised until waves of complementary innovations are developed.