This week, we examine the broadening leadership in global equities and how we’re positioning portfolios to participate. Global markets are gaining momentum, with international leadership strengthening—Japan’s TOPIX 1500 up 37% year-to-date with broad participation (~82% above the 200-day moving average), Singapore up 28% year-to-date, and emerging markets breaking out on a softer USD. We are selectively increasing global equity exposure through our global fund, maintaining high-conviction positions in leading semiconductors (NVDA, AVGO, LRCX) and platforms such as Sea Limited (SE), while trimming select U.S. holdings and keeping dry powder within a disciplined, breadth-driven framework.
Key Points
Sustained global market momentum
- International equity markets are gaining strength, with multiple regions breaking out to new highs. The MSCI Eurozone has accelerated in August, Japan continues to lead with new all-time highs after decades of consolidation, and Singapore has posted a 28% YTD gain, breaking out decisively.
Japan’s exceptional leadership
- The TOPIX 1500 small-cap index is up 37% YTD, supported by broad participation with over 50% of constituents at 20-day highs in recent weeks and 82% above their 200-day moving average. The Japanese market remains under-owned globally and continues to outperform the U.S.
Emerging markets awakening
- Emerging markets are collectively at new highs, supported by a weaker U.S. dollar. Strength is led by commodity-heavy markets such as Peru and Argentina, both benefiting from structural economic shifts, and Asia’s largest companies are sharply higher.
Select global holdings delivering outsized results
- Sea Limited (SE), a core global position, delivered a major earnings beat with EPS growth of 370% this year, driven by e-commerce leadership in Southeast Asia and rapid expansion into Latin America. Analysts expect continued upward revisions.
Global semiconductor strength
- NVIDIA (NVDA), Broadcom (AVGO), and Lam Research (LRCX) are at or near new highs, supported by easing China restrictions and optimism around AI adoption. These remain key portfolio holdings given their leadership within the technology sector.
Favourable breadth signals abroad
- While U.S. market breadth remains uneven, breadth in select international markets has been expanding. This broad participation, particularly in Asia, reinforces the case for increasing non-U.S. exposure in portfolios.
Portfolio strategy shifts
- The firm is actively recommending topping up global equity exposure through its global fund. This involves selectively trimming certain U.S. holdings to redeploy capital into less-crowded international sectors and themes with stronger relative momentum.
Evidence-based allocation
- Current positioning reflects a preference for global markets where earnings momentum, valuation support, and breadth trends align. The approach remains disciplined, with stops maintained on all positions and cash ready to deploy as opportunities arise.