Offshoring

The geographic distribution of returns has changed this year, after decades of U.S. exceptionalism. In the table below, you have the YTD performance of several countries ETFs measured in USD. As you can see, the U.S., in terms of SPY, is on the right side of the table with a -4% for the year. The best performers are in Europe, LatAm and China. Among the few countries that are performing worse than the U.S., India and New Zealand are the notable exceptions. Not only foreign stocks have performed better, the USD has weakened against other currencies, particularly the Euro, which has added an extra 6% to the mix. Portfolios keep rotating looking for better risk adjusted returns and the irony here is that the U.S. is onshoring manufacturing, while money is offshoring looking for returns.

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