The first half of 2017 is now in the books. You have to love a full year’s worth of returns in the first six months of the year. My guess: Returns get harder and the ride gets bumpier from here. With volatility so low, it’s hard not to expect some mean reversion this summer. Holding some cash and being tactical around the core could be the best bet heading into year end.
More often than not, advisors and clients move too slowly in increasing allocations away from the U.S., thus missing out on much of the International rebounds that have occurred throughout history. This is largely due to Home Country bias and not feeling as comfortable with having exposures to countries and companies with which they aren’t as familiar.
We view Japanese equities as the 7th most attractive investment out of a universe of 34 liquid investable countries. Japan stands out with stronger than average (and improving) fundamentals with below average risk. Furthermore, Japanese equities exhibit attractive value, with the country’s overall value profile coming in at 7th overall in April.