INVESTING
Years of poor performance and paltry valuations have spawned an increasingly pro-investor business climate in Europe and Asia. Executives at Tweedy Browne say they are seeing more serious corporate governance and concern for shareholder value as activist investors have taken board seats on sleepy, calcified companies in recent years.
At the same time, a handful of strategists are downright skeptical about the continuation of a bull market in U. S. equities. Kristina Hooper, chief market strategist at Man Group, thinks global investors are likely to question their view of U. S. Treasurys as a safe haven as government debt now exceeds 100 % of GDP.
“ We could see bond yields go up,” she said at Financial Advisor’ s Invest in Women conference, held in Boston in April. Moreover, she said, there could come a day when a Treasury auction will“ go poorly and it will blow up yields.”
Multi-trillion-dollar annual federal budget deficits are considered a real risk among institutional bond investors at asset management firms like Vanguard and DoubleLine, but Hooper went further. International investors should consider the possibility of the U. S.“ threatening not to pay interest on its debt,” she argued.
Economic policy uncertainty is the biggest factor affecting the business climate. Foreign countries are“ reshaping their trading partners over time,” Hooper continued, with an eye toward becoming less dependent on America.
All this means U. S. equities are no longer viewed as defensive, she said, and her firm, one of the world’ s largest investors, believes it could be time“ to fade U. S. stocks.” In contrast, one can find foreign securities that are“ on fire.”
Emily Roland, co-chief investment strategist at Manulife John Hancock Investments, joined Hooper on stage at the event and offered a different perspective on the global investment landscape. She agreed with the widely shared view that U. S. technology shares have enjoyed“ an amazing run” and suggested it was time for American investors“ to go shopping.”
She acknowledged that deficits, tariffs and inflation were problems but maintained that advisors could still find attractive investments within U. S. borders. For starters, she said that both U. S. Treasurys and corporate bonds were attractive and likely to rally later this year. Despite the recent volatility, she said her firm still liked high-quality American companies with durable earnings momentum.
U. S. technology companies, notably semiconductor businesses, have captured all the attention, but Roland said the stock market’ s recent narrative that AI would likely eviscerate many software companies was overdone. She also said
Globalization may have become a dirty word in the last decade, but transnational investments are alive and well— and a way to play valuation discrepancies.
there were opportunities in other industries including industrials, infrastructure, financial companies and select cyclicals. Both Hooper and Roland agreed that investors need to focus on both quality and broad diversification.
Christian Heck, deputy head of the global value team at First Eagle Investments, says that for the first time in 13 years his firm is tilting toward foreign markets.“ The U. S. is very expensive” with almost every equity pricing metric near their all-time peaks,” he says. In contrast, foreign markets are priced much closer to their historical means.
First Eagle typically looks to invest in companies with“ a 30 % margin of safety,” which leads it to stocks of strong businesses that have experienced near-term setbacks. Two examples Heck cites are Meta Platforms, a top holding, and LVMH, the
French luxury goods concern.
Meta stock has been battered twice in the last decade. The first time was in 2017, when it was caught up in scandal after accusations that Cambridge Analytica had used users’ data without their consent. The second time came in 2022 on reports that Meta had made billions of dollars in bad metaverse investments and its shares fell 70 %. Both times, First Eagle accumulated shares in the social media giant.
LVMH also faced an upheaval as the stock was“ cut in half” over the last year, Heck notes. But First Eagle believes a growing number of people are joining the upper middle class and indulging in luxury goods.
Globalization may have become a dirty word in the last decade, but transnational investments are alive and well— and a way to play valuation discrepancies. South of the border, Walmart’ s subsidiary Walmex controls 50 % of Mexico’ s grocery market. It is growing faster than the U. S. parent and“ it gets technology for free” from the Bentonville, Ark.- based behemoth. Yet Walmex trades at only 12 its EBIT while Walmart trades at 30 times.
Healthcare is one industry that many asset managers agree is cheap. Tom Shrager, a managing director at Tweedy Browne, says the firm is now reducing its position in GSK, a U. K.-based drug giant that was extremely cheap several years ago.
However, it is maintaining its position in Novartis, the Swiss pharma giant that has seen its shares jump 34 % this year on the back of a strong pipeline and the spinoff of its generic drug and eye-care business units. Another of Tweedy Browne’ s largest holdings is Ionis Pharmaceuticals, a U. S. biotech concern offering RNA-targeted treatments for a variety of conditions, including medicines to reduce triglyceride levels.
Value investors like First Eagle and Tweedy Browne are looking at individual companies to invest in, not geographies. But if their instincts that a secular change could be in its early stages, investors may find the most action outside the U. S.
46 | FINANCIAL ADV ISOR MAGAZINE | MAY / JUNE 2026 WWW. FA-MAG. COM