Paul Quinsee of J.P. Morgan Asset Management stated that global stock market returns have, in some instances, even surpassed those of the S&P 500, with technology companies comprising only a minor portion of certain strategies.
"International value stocks are far more diversified than tech stocks and the 'Magnificent Seven,'" said Quinsee, Global Head of Equities at J.P. Morgan Asset Management, during a television interview on Thursday. "You can construct an international value stock portfolio, buying solid companies at around 11 times earnings. Technology stocks make up only about 3% or 4% of such a basket."
Quinsee's perspective offers a counterbalance to the current market frenzy surrounding artificial intelligence (AI). Following the Nasdaq 100's worst monthly performance in a year during March, partly due to geopolitical tensions, renewed enthusiasm for mega-cap tech stocks is broadly driving the market higher. Fueled by AI optimism, a basket of U.S. semiconductor manufacturers has surged nearly 60% since early April, continuing to climb even amid concerns over accelerating inflation triggered by soaring energy prices.
Quinsee made clear that the tech trade "cannot be ignored." Simultaneously, he pointed out that international value stocks have delivered a 40% return over the past 12 months and a 25% compound return over the past three years. He noted this performance "has actually significantly outpaced the S&P 500."
"The European banking sector has transitioned from being un-investable to comprising solid companies," he said. Meanwhile, energy stocks, which were "being discarded a year ago, are now seeing significant earnings growth."
Quinsee expressed that he does not expect this level of outperformance to persist indefinitely. "There are other ways to make money in global equity markets. I think it's precisely at times like these, when everyone's attention is focused in one place, that this point is even more worth remembering."
Comments