This basket of global stocks from Goldman Sachs has nearly kept pace with the Magnificent Seven while excluding tech

By Joseph Adinolfi

The list of more than 80 stocks from Goldman Sachs includes Eli Lilly and Novo Nordisk, along with many more obscure names.

U.S. stocks have dominated the international-markets landscape for more than 50 years, and that's unlikely to change any time soon. But they have become more pricey lately, prompting some investors to consider bargain-hunting abroad.

Adding exposure to foreign stocks likely won't shield your portfolio from a selloff in the U.S., given that global equity markets tend to rise and fall together. But that doesn't mean there aren't compelling opportunities to be found, according to a team of Goldman Sachs Group strategists led by Peter Oppenheimer, the bank's chief global equity strategist.

"On balance, while we like the U.S. market and believe its relative growth is based on strong fundamentals, we also believe that increased geographical diversification is justified," Oppenheimer and his team wrote in a recent report.

"Put another way, we believe that there are many companies outside of the US that should be considered as part of a global diversified portfolio and should not be ignored simply because their base and listing location is outside of the U.S."

Investors looking to diversify may also want to consider shifting some exposure away from technology, the most valuable sector across global markets. Tech stocks have come to dominate equity indexes around the world. And although concentration is most extreme in the U.S., Europe and Japan aren't far behind.

So Oppenheimer and his team have produced a list of "ex-tech compounders" drawing from a diverse group of countries and industries that, as the name suggests, excludes technology stocks. These companies are all large-capitalization components of the MSCI All Country World Index XX:892400. They all share a number of promising characteristics, including strong profitability, low historical volatility, and strong balance sheets.

They have also nearly kept pace with the Magnificent Seven and Europe's GRANOLAS, while maintaining significantly more attractive valuations.

See: This grouping of stocks has actually kept up with the Magnificent Seven, and with a lot less risk

Stocks in Goldman's list are trading at their cheapest levels since 2016, as the chart below shows.

They're also trading at their lowest premium relative to the global stock market since 2018, if one excludes the tumult of the 2020 COVID-19 market panic.

The list includes more than 80 companies, including several of the largest publicly-traded companies in the U.S. and Europe. Eli Lilly Co. (LLY), Novo Nordisk (DK:NOVO.B) and LVMH Moet Hennessy (FR:MC) all appear near the top.

Health care stocks are heavily represented, as are consumer discretionary, industrials and materials names from around the world.

See the full list below:

-Joseph Adinolfi

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