Andrew Fargus

US equities are set to outperform the rest of the world in 2024. This would mean that over the past 15 calendar years, the US will have outperformed in 13 of them for a Sterling investor. US equities now represent about 65% of global equity market capitalisation, and several of the biggest American companies are now worth more than the entire stock markets of major European countries, such as France and the UK.

We acknowledge that the US is home to many of the world’s best companies and dominant technology firms, as well as seeing good profits growth and a potential boost from the Trump administration. Yet we are concerned about the high valuation of its equity market and its largest constituents.

We expect to be underweight the US relative to global indices at around 40% of the overall equity portion of portfolios. We see potential in the relatively lowly-rated UK and in Emerging Markets, as well as benefits from using a global thematic approach.