This month, European markets are looking good. European countries continue to climb up the model. Sweden is the newest addition to the top 5 and boasts a profile in the top 10 of fundamentals, momentum, and risk. European markets have continued to show impressive performance. Every developed European country in our model has outperformed the ACWI on the year.
Rapidly decelerating momentum caused Russia to drop from the top 5 of the model. Despite heavy political risks and poor momentum, Russia still offers a unique value play at 3.8 forward price/earnings ratio.
Notable Moves to the Upside
- Thailand… improved by 11 spots up to #20 in the rankings. The majority of Thailand’s move came from improving momentum. Thailand could continue to climb in the rankings as they are currently in the top 10 of both fundamental and valuation.
- Sweden… moved up 6 spots and is now ranked 5th overall. Sweden showed improving fundamentals to go along with an already top 10 risk and momentum ranking. Last month, they had the greatest acceleration in OECD leading indicators.
Notable Moves to the Downside
- Russia… fell 4 spots to #7 overall, despite still holding the best valuation rank in the model. Political tensions caused a rapid drop in their equity market, which now leaves Russia having the third worst momentum score in the model.
- Israel… had a brief stint as the #1 overall country, but has quickly fallen 9 spots to 10th overall. Increasing risk and deteriorating fundamentals moved Israel down, despite another month of positive performance relative to the ACWI.
For more on countries, strategies, and movement in the model, see our full Portfolio Notes: