Snapshot

The stocks that eclipsed the FAANGs


All of the most exciting developed market companies to invest in are located in the US, right? Think again.

Yes, the US stock market has powered ahead…

In terms of performance, the US stock market has dominated the global landscape for years.

It has returned 73% in the five years to 31 July 2020 (in dollar terms), leaving all but the small New Zealand market (which only includes seven stocks) in its wake.

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…but most of the top performing companies have been located outside of the US

Companies such as the FAANGs – Facebook, Apple, Amazon, Netflix, and Google – make all of the headlines.

But, investors may be surprised to learn that, over the past five years, seven of the top ten performing developed market stocks in the MSCI World index and 16 of the top 25 (in dollar terms) have been located outside of the US.

Canada, Japan, New Zealand, Sweden Australia, Germany and Denmark all feature. They span sectors as diverse as milk production, mining, and, of course, technology.

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Particularly noteworthy is that, despite the fact that Japanese stocks in aggregate have underperformed their US counterparts by 55% over the past five years, four of the top 25 performing stocks are Japanese.

So, while international markets have lagged the US and US companies may make most of the headlines, investors should ignore international stocks at their peril.

To do so could mean missing out on some of the best performing companies in the world.

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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