This month, some emerging markets had a strong performance while the three largest constituents in the MSCI ACWI Index stalled. Latin America, which was down -20.82% over the last 12 months, had a great month up 8.82%. While some European countries (Italy, Spain) are quickly rising in the rankings, previous mainstays (Germany, Austria) have fallen.
The March model has no meaningful concentration at the top or bottom to any region, highlighting the importance to country selection during the current market cycle.
Notable Moves to the Upside
- Italy… improved by 16 spots from 23rd to 7th in the rankings. Almost their entire move can be traced to their momentum score. They are the #1 ranked momentum country up over 24% during the last 6 months.
- Israel… moved back into the top part of the model and is now ranked 2nd overall. Israel is the best performing country over the last 3 months and is showing decreasing risk with an attractive currency valuation.
Notable Moves to the Downside
- Russia… is continuing to drop in the model, despite having the cheapest overall valuation. Russia is now the riskiest country we follow. Given the political tensions, CDS rates in Russia are up over 235, while the average country is in the 80’s.
- Germany… has been consistently in the top part of the model for the last year, but has fallen to 12th overall. The main drag on Germany has been slowing momentum. While other parts of Europe are still accelerating, Germany has stalled.
For more on countries, strategies, and movement in the model, see our full Portfolio Notes: