On the heels of last night’s election results, we’ve seen some major moves in equities on a global scale. While the S&P 500 is up over 2% today, the MSCI All Country World Ex-US Index ETF (CWI) is down slightly more than 1%. Since the CWI ETF first launched in 2007, today would be just the fifth time it fell over 1% on the same day the S&P 500 ETF (SPY) rallied more than 1%. The other days were 1/28/08, 11/9/16, 2/24/22, and 10/24/22. Even more notable is that there have only been two other days when the daily performance spread between the two ETFs (in favor of SPY) was wider – during the Financial Crisis two days after the 2008 election on 11/6/08 and the day after the Brexit vote on 6/24/16.It’s been a historic day.
Today’s performance gap begs the question of whether international stocks will ever outperform again. The chart below shows the relative strength of the US (SPY) versus the rest of the world (CWI) since the latter ETF’s launch in 2007. Outside of a few years after it first started trading when international stocks performed roughly in line with the US, it’s been a one-way move in favor of US stocks for over a decade now, and today’s move only added fuel to the US rocket ship.There will come a time when international stocks have their day in the sun, but international investors aren’t sure how long they can hold their breath.
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