International Equity Funds Bounced in Second Quarter
The comeback was uneven, however.
Following a catastrophic start to the year, international equities rebounded sharply in the second quarter. The bellwether MSCI ACWI ex USA benchmark rose 16.1%, bringing its year-to-date return to a slightly more palatable negative 11.0%. Emerging markets, which suffered a greater decline during the first quarter, regained 18.1% versus a 15.3% increase for international developed markets. Regional performance followed a similar pattern as Latin American, Australian, and European markets rebounded more strongly following larger losses than Asian equities in March.
Value stocks didn’t see the same rebound, though. After falling 28.6% in the first quarter, the MSCI ACWI ex USA Value Index clawed back 12.8% in the second quarter, but its growth counterpart gained 19.1% after a loss of just 18.3%. Typically, one would expect the weaker-performing segment to make up more lost ground after a change in sentiment, but the coronavirus pandemic’s market impact had the opposite effect. Demand for growth-oriented technology, e-commerce, and healthcare stocks increased as investors piled into companies largely insulated from the effects of mandatory lockdowns. Winners included the likes of Canadian e-commerce platform company Shopify (SHOP), which more than doubled during the quarter.
Adam Sabban does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.