In an Unsteady World, Time to (Finally) Tilt Away from U.S. Equities?

Acadian

Research

5 Pages

Acadian argues that post‑Global Financial Crisis tailwinds that favored U.S. equities have diminished, making a case to rebalance toward non‑U.S. equities. With the U.S. equity market’s performance dominance waning—dropping to 11th place by mid‑2025—slowing relative earnings, stretched valuations, and weaker market integration signal it’s time to diversify geographically.

Key Takeaways

Shifting performance leadership: In 2025’s first half, non‑U.S. equities produced their strongest relative returns to the U.S. seen in decades.
Valuation tension: The U.S. now trades at elevated multiples versus international peers, creating vulnerability to external repricing.
Diversification merits renewed emphasis: Reduced global market integration raises the payoff of strategic regional allocation, especially amid macro and policy uncertainty.
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