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A Tepid Third Quarter for Non-U.S. Stock Funds

Non-U.S. stocks lagged U.S. equities again.

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Global equity markets were tepid in 2019’s third quarter. Non-U.S. stocks once again lagged U.S. equities, and U.S.-China trade tensions exacted a toll on developed and emerging markets. Latin America and India were the worst-performing regional categories, while Japan staged a late-quarter comeback, turning the tide on its slow start to the year.

Vanguard Total International Stock Index (VGTSX), which has a Morningstar Analyst Rating of Gold, lost 1.7% in the quarter through Sept. 27, 2019, but was still up 11.3% for the year. Emerging markets fell harder, as Bronze-rated Vanguard Emerging Markets Stock Index (VEMAX) fell 3.8% in the quarter while preserving an 7.7% 2019 gain. Gold-rated Vanguard Total Stock Market Index (VTSAX), a proxy for U.S. stocks, eked out a 0.6% quarter gain and posted a 19.4% gain for the year. Global funds with large U.S. allocations have been among the world large stock Morningstar Category’s best performers for the year to date. Bronze-rated BNY Mellon Worldwide Growth (PGROX) had nearly 65% of assets in U.S. stocks in its most recent portfolio, and its 22.2% gain through quarter-end was top-decile relative to peers.

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Nick Watson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.