International Value [[{“value”:”
We’re pleased to report that our International portfolio delivered a strong return of 9.0% in the first quarter. This performance outpaced the MSCI EAFE index by 210 bps and beat the MSCI EAFE Equal Weighted index by 280 bps. While we trailed our value style benchmark by 260 bps, we are encouraged by the absolute return and the meaningful outperformance versus broad and equal-weighted international benchmarks.
The broader market story this quarter was the remarkable strength of markets outside the U.S. While the S&P 500 declined 4.3%, the MSCI EAFE index rose 6.9%, an 11.2 percentage point difference and the widest quarterly spread between the two since Q2 of 2002, nearly 23 years ago.
Non-U.S. markets have been shunned and with reason, given the dominating performance of the S&P 500 over the past 15 years. But in the wake of investors passing over stocks outside the U.S., we’ve found plenty of opportunities. Heading into this year, we had 14 high-quality businesses trading for less than 10x forward earnings and the overall portfolio traded at a P/E of just 10.4x. In the first quarter, we benefited from this extreme valuation potential, and we believe there is substantially more remaining.”}]]
