3 Points to set the Global Landscape
- Latin America is picking up momentum as we head into the 4th quarter. Led by Brazil, Peru, and Mexico in August, the region has outperformed the ACWI by 10.72% over the last 3 months. Latin America underperformed the ACI by 36.16% in 2013, so it still has plenty of ground to make up.
- Developed Europe continued to underperform in August. Italy, Spain, Germany, Sweden, and Austria all posted negative returns for the month, and the region is down -3.38% for quarter.
- Countries with the strongest fundamentals continued to outperform while buying countries with cheap valuations has been a drag on country selection.
2 Countries that are rising
Mexico jumped 16 spots in the rankings and is now ranked #6 overall. Mexico has had rapidly improving momentum and fundamentals. The one drawback to Mexico is its valuation ranking. They are the 3rd most expensive country in the model and have the richest P/E ratio at 24.2.
Brazil has had two months of big moves in the model and is currently ranked #5. The majority of their move has come from accelerating momentum. Brazil has been the best performing country over the last 3 months, up 19.27%.
2 Countries that are falling
South Korea dropped 9 spots and is now ranked 12th overall. Momentum has slowed and risk has increased, primarily coming from currency appreciation in the Won. Over the last 3 months, the Korean Won has strengthened by 0.6%. Downside volatility has also been increasing over the last 30 days.
Austria continued to slide in the rankings despite improving risks. Their valuation got more expensive coupled with slowing momentum. Austria has been the worst performing country in the model over the last 3, 6, and 9 month periods.
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