ERShares On The Recent Move From Bonds To Non-US Equities

Based on a sliding dollar and relatively low overseas valuations, non-US equities have become more attractive in recent weeks. On Thursday, EntrepreneurShares Founder & CIO, Joel Shulman, appeared on Fox Business’ “Mornings with Maria” to discuss the merits of investing in non-US Equity ETFs at this time. 

Shulman notes that an upcoming stimulus package will generate a much-needed cash infusion to the economy. However, he points out that inflation and interest rates have been rising in recent months and are well-off their all-time lows. 

He also describes how bond prices have appreciated with interest rate declines over the past forty years, though he sees this trend now reversing. Shulman expects stocks may receive a modest benefit from a migration out of fixed income (bonds) to other investment vehicles.  

As Shulman states, “We’ve seen forty years of bond prices going up and interest rates going down. That’s starting to change. And that’s going to cause infusion of cash going to fixed-income to stocks in some other areas.”

Finding That Attraction

However, his primary focus is on the sliding dollar and relatively low overseas valuations. Both of these characteristics make non-US equities attractive at this time. 

For example, Shulman discusses the 10-11% MTD return of the EntrepreneurialShares Non-US Small Caps (NYSE: ERSX) compared to the 1-2% appreciation for US markets. Unsurprisingly, these returns have coincided with an exodus of $25B shifting to off-shore non-US Equity ETFs in just the past couple of months alone. 

Though generally bullish toward US equities long-term (especially Technology and HealthCare), Shulman believes US investors’ best opportunities now reside in non-US (Entrepreneurial) companies. He highlights the abundance of non-US Entrepreneurial companies residing in Denmark, Sweden, Israel, Netherlands, China, and Malaysia, which suggests that individuals can invest directly.

Alternatively, investors can select a non-US equity ETF or Mutual Fund that already holds many international companies in one simple investment vehicle. 

For more market trends, visit ETF Trends.