The 2025 ex-US investment opportunity set

The recent political shifts in the United States have prompted global investors to reassess their strategies, focusing on opportunities beyond US borders due to high domestic stock valuations and potential geopolitical disruptions. The outlook for US stocks remains positive with expected earnings growth, but global diversification is recommended to capitalize on varied risk-return profiles.

In North America, Canada shows promise with strong financial and energy sectors, despite trade tensions under President Trump. Conversely, Mexico faces challenges from potential remittance taxes and political uncertainties, yet its youthful population and attractive stock valuations offer long-term potential.

Brazil presents appealing opportunities with its cyclical market and stable economic priorities, while China's growth is bolstered by domestic consumption and financial reforms, despite US tariff threats. Taiwan benefits from the global semiconductor boom, and Japan's economy is supported by export growth and investor-friendly reforms.

India's strong US partnership and infrastructure developments make it a standout in Asia, with potential to offset tariff impacts through increased manufacturing. South Korea faces trade risks but undervalued equities and strong institutional frameworks suggest potential recovery.

The UK, with its undervalued equities and high dividend yields, offers a unique opportunity amidst European instability. Overall, global markets are expected to benefit from AI advancements, sustainable development, and easing monetary policies, underscoring the importance of diversification in investment portfolios.