A tale of two decades for U.S. and non-U.S. equity

December 7, 2020

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The past 10 years have seen U.S. equity strongly outperform its international peers, largely because investors expected the U.S. economy to grow faster and it did. Using a sum-of-parts framework to look at the drivers of that outperformance—valuation expansion, earnings growth, dollar appreciation—Vanguard research finds that continued long-term outperformance of U.S. equities is unlikely. We expect that investors who maintain globally diversified equity allocations will be rewarded in the years ahead. Read more in A Tale of Two Decades: Past Is Not Prologue.

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  • All investing is subject to risk, including the possible loss of the money you invest.
  • Diversification does not ensure a profit or protect against a loss.
  • Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.