Earlier this year, when domestic and macroeconomic uncertainty kicked up, many advisors chose to broaden their equity exposure into international companies. At the time, this made plenty of sense.
QINT offers diversified exposure to international equities, excluding US stocks, with strong representation from innovative and market-leading companies like Novartis, Hermes, and Sony. Top holdings are attractive for their innovation and market leadership, but rising P/E ratios driven by declining earnings raise valuation concerns. Despite QINT's diversification, many top holdings appear overvalued, making the ETF less attractive from a valuation perspective at current levels.
Advisors and investors with a large overweight to U.S. equities felt the pain of significant drawdowns mid-April, as U.S. tariffs sent markets into a tailspin. Diversifying internationally could prove advantageous in 2025, given the muddied outlook for U.S. markets.
As investors look at their portfolios, foreign diversification is growing in prominence as a theme to watch. Domestic risks — including a higher-for-longer rate regime, the potential impact of tariffs, and stubborn inflation — loom over domestic-heavy U.S. portfolios.