U.S. equities are a tough place to be right now, with the Fed’s rising rate agenda and a resulting recession looming over markets. Add in the aftershocks from the broad market selloff in 2022, and it’s fair to be a bit worried by domestic investing. But look abroad, and opportunities appear. A quality international ETF like the American Century Quality Diversified International ETF (QINT) is one way to get that exposure.
Why look abroad? Valuations are in an attractive place for foreign equities relative to U.S. equities, with U.S. sectors like tech, communications, and consumer goods and services in particular facing some headwinds. The U.S. economy could even lag behind Europe’s this year, despite ongoing geopolitical- and energy supply-related challenges from Russia’s invasion of Ukraine.
While developed market regions like Europe could be set to outdo certain parts of the U.S. economy, so too are emerging markets poised to go on a run of their own, with the category more similar now to developed economies and including some notable differences between nations. While BRICS members Brazil and India are both in the EM category, they certainly have their differences. Above all, China offers an intriguing opportunity as the nation loosens its zero-COVID rules and attempts to boost its economy.
QINT can guide investors through these varying trends abroad with its approach. The quality international ETF tracks the American Century Quality Diversified International Equity Index and charges 39 basis points, investing in non-U.S. companies with sound financials, strong growth opportunities, and good fundamentals for their share prices. Leaning towards larger firms, it moves between growth and value depending on the market and owns a narrower portfolio than a regular index ETF.
QINT is one of a group of multi-factor strategies that invest in international equities, and it has returned 22.6% over the last three months for its trouble. It’s a big wide world out there with a lot of countries offering varying opportunities. As such, it may be a good time to revisit a quality-focused ETF like QINT that looks to bigger names abroad that may be better poised for 2023 than their U.S. counterparts.
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