International stocks generally performed well during the first quarter of 2017, in reaction to better economic data across the globe. Emerging Markets largely outperformed and contributed to performance as the so-called Trump rally sputtered and the US dollar weakened. Improving earnings expectations are helping to drive equity rallies in many regions of the world. Further, the globally coordinated earnings recovery continues to support the rally in equities, and specifically cyclicals, where we are overweight. Emerging Markets earnings growth is now projected to lead Developed Markets earnings growth for the first time since 2011, per JP Morgan’s analysis. Strong earnings combined with better manufacturing data over the past 6 months should continue to buoy both cyclical sectors and Emerging Markets returns. During the quarter, we exited certain outperformers in Developed Europe and increased exposure in Latin America and Australia. From a sector perspective, Portfolio weights in Materials and Consumer Discretionary increased, while exposure to Financials and Consumer Staples decreased.
Information contained herein was obtained from recognized statistical services and other sources believed to be reliable and we therefore cannot make any representation as to its completeness or accuracy. Any statements not of a factual nature constitute opinions which are subject to change without notice.
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