No single ticker was named. Emerging markets ETFs are one way for retail investors to get exposure. Not a recommendation.
International equities poised to outperform US
The guest argued that international and emerging market equities are historically cheap relative to the US, signaling a multi-year period of outperformance driven by mean reversion.
The argument
Grantham noted that non-US equities reached valuation lows relative to the US that historically precede handsome, multi-year outperformance. He expects this mean-reversion cycle to continue, pointing to recent strong performance in international value strategies as an early sign.
The thesis, stress-tested
✓ What validates it
- ✓Continued outperformance of international value indices over the S&P 500
- ✓Earnings growth acceleration in emerging markets relative to the US
▸ Risks discussed
- ▸US equity momentum could persist longer than historical averages suggest
- ▸Global macroeconomic shocks could disproportionately impact emerging markets