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U.S. Stocks Have Outperformed Foreign Stocks Since President Trump Was Elected
View from the Observation Deck
Today's blog post indicates that equity investors have prospered since Donald Trump won the presidential election on 11/8/16.
The major U.S. stock indices have outperformed their foreign counterparts to date.
President Trump campaigned on the promise that his administration would put America's interests first.
The Trump administration's use of trade tariffs, particularly those levied against China, has tempered investor sentiment towards foreign stocks, in our opinion.
Fund investors have favored U.S. stock portfolios over their foreign counterparts over the past year. For the 12-month period ended 6/30/19, investors funneled an estimated net $36.22 billion into U.S. Equity and Sector Equity mutual funds and exchange-traded funds (ETFs), compared to estimated net outflows totaling $1.32 billion from International Equity mutual funds and ETFs offered in the U.S., according to Morningstar.
From 11/8/16 through 6/30/19, the U.S. dollar rose by 0.15%, as measured by the U.S. Dollar Index (DXY), according to Bloomberg. An essentially flat U.S. dollar likely had minimal influence on the performance of the foreign stock indices, in our opinion.
The 49.27% cumulative total return posted by the S&P 500 Index (see chart) equates to a 15.92% average annualized total return, according to Bloomberg. For comparative purposes, from 1926-2018 (93 years), the S&P 500 posted an average annual total return of 9.99%, according to Ibbotson & Associates/Morningstar.
This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The NASDAQ 100 Index includes 100 of the largest domestic and non-financial companies listed on The NASDAQ Stock Market based on market capitalization. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance. The S&P 600 Index is a capitalization-weighted index that tracks U.S. stocks with a small market capitalization. The S&P 400 Index is a capitalization-weighted index that tracks the mid-range sector of the U.S. stock market. The MSCI BRIC Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of Brazil, Russia, India and China. The Nikkei 225 Index is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The MSCI Europe Index is a free-float weighted index designed to measure the equity market performance of the developed markets in Europe. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI World (ex U.S.) Index is a free-float weighted index designed to measure the equity market performance of developed markets.
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Tuesday, July 30, 2019 @ 1:13 PM
These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.