Global Stocks Draw Investors After Vaccine Rollout

Global Stocks Draw Investors After Vaccine Rollout

Investors betting on a continued economic rebound are increasingly looking beyond U.S. stocks.

Many money managers are focusing on emerging markets, which they expect to outperform as the global economy accelerates in the wake of the Covid-19 vaccine rollout. Some are also taking a look at European markets, which lagged behind in 2020 but are dominated by cyclical shares.

Investing in U.S. stocks, they say, has increasingly become a concentrated bet on the technology sector, which contributed more than half of the S&P 500's 18% total return last year. The tech-laden Nasdaq Composite fared even better, rising 45% including dividends. Those gains might be difficult to replicate in the new year.

“We feel like the opportunity from here going forward is really going to be in the international markets outside of the U.S.,” said Munish Malhotra, co-portfolio manager of global equity strategy at Cambiar Investors. Potential easing of Washington's trade tensions with China could reduce a headwind, while in the U.S., big technology companies might face challenges