22 January 2026
After more than a decade of pronounced US equity market leadership, recent trends suggest that international markets are reasserting themselves as compelling destinations for investors. According to a recent CFA Institute article, a combination of valuation differentials, structural reforms and cyclical adjustments is helping markets outside the United States catch up — potentially marking the beginning of a longer‑term rebalancing in global portfolio allocations. 
Valuation differentials and structural momentum
One key driver of this shift is the valuation gap between the US and international markets. With many US equity indices trading at historically elevated multiples — particularly in technology and other mega‑cap sectors — several international markets appear relatively undervalued in comparison. This valuation discount is attracting attention from investors seeking better risk‑adjusted returns and diversification benefits. 
Beyond cyclical factors, the article highlights growing structural momentum in international markets. In regions such as Asia and Europe, policymakers and market participants are making progress on corporate governance, regulatory reform and fiscal initiatives that strengthen fundamentals and improve the investment climate. Meanwhile, emerging markets are deepening regional trade ties and institutional frameworks, suggesting more robust long‑term growth prospects. 
The context of decade‑long US leadership
Over the past 15 years, the United States outperformed global peers due to strong earnings growth, innovation leadership (especially in technology and digital services), and robust capital market depth. However, as economic cycles evolve and global macroeconomic drivers shift, the limits of that outperformance are being tested. With some parts of the US market appearing stretched, the opportunities for international diversification have become more pronounced. 
Implications for global investors
For global investors, this emerging trend is not just a tactical consideration but may signal the early stages of a longer‑term rebalancing of performance leadership. Allocations to Europe, Japan, Asia‑Pacific and select emerging markets could enhance diversification, especially if international earnings and valuations remain attractive relative to the US. From a risk management perspective, broadening geographic exposure can help mitigate concentration risk tied to any single market or sector. 
Why this matters for CFA Society Italy Members
For members of CFA Society Italy, the reemergence of international investing underscores the importance of a global perspective in portfolio construction and advisory work. Italian and European investment professionals have long appreciated the value of diversification across regions and asset classes. As structural reforms deepen and non‑US markets become more competitive, having a nuanced understanding of global market trends will be vital for assessing relative valuations, identifying opportunities and managing risk for both institutional and private clients.
Moreover, this shift aligns with the Society’s mission to promote professional excellence and informed investment decision‑making in a rapidly evolving landscape. By incorporating insights on international market dynamics, Italian finance professionals can better position strategies to capture broad market gains while remaining disciplined about risk exposures.