February 2014 Country Rankings

Going into February, countries with accelerating momentum and quality fundamentals continued to struggle.  Some of the best performers from 2013, including the US, Japan, and Belgium all had negative months. In our Country Ranking Model, Brazil continued to drop.  Since the date that Rio received the Olympic bid, Brazil’s stock market has underperformed the ACWI index by more than 80% in USD.

This month, Israel was the most surprising move in the model, claiming the top ranking and the first ever appearance in the top 5.  Israel has been the hottest market over the last 3 months and is ranked in the top 10 of every factor group.

Notable Moves to the Upside

  • Israel… jumped 15 spots from 6th to 1st overall.  Israel is the best performing country over the last 3 months, up 9.7%.  They are also showing improving fundamentals, with accelerating OECD leading indicators.
  • Indonesia… moved up 17 spots after showing sizable improvements in fundamentals, momentum, and risk.  Indonesia currently has an internal growth rate of 13.5% while the average country is only 6.5%.

Notable Moves to the Downside

  • Brazil… fell 18 spots and is now ranked 30th in the model.  Momentum continues to decline and fundamentals are deteriorating.  Brazil is the second worst performing country over the last 3 months, down -13.8%.
  • Japan… finally fell out of the top 5 and is now ranked 10th overall.  While Japan dropped in momentum and valuation, the majority of this move came from increasing risk. Japan is now the riskiest country in the model with poor valuations and increasing downside risk.

For more on countries, strategies, and movement in the model, see our full Portfolio Notes:

PDF imageCountry Portfolio Notes February 2014

Top 6 Countries in February

Top 6 Countries in February

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