OUR BIG “BUY ASIA, SELL EUROPE” IDEA IS WORKING WELL THIS YEAR
Our giant, long-term “buy Asia, sell Europe” idea is still winning big.
For many years, we’ve highlighted a giant idea you can label, “Asia up, the West not so much.” The idea concerns the gradual increase of Asian economic power… and the gradual decrease of old European economic power.
Many European countries have declining population growth, massive unfunded obligations, and onerous business regulations.
Many Asian countries have healthy population growth and are embracing free markets.
This creates a tailwind behind the region’s stock and real estate prices.
This is a long-term idea… But it’s working particularly well right now.
You can see it working with a year-to-date performance chart of stocks in Singapore versus their Italian counterparts.
Singapore is a global financial hub and is one of the world’s easiest places to do business. It also has a low corporate tax rate. Italy is deep in debt and tough to do business in.
As you can see in today’s chart, free markets work. The big Singapore fund (aka EWS, the black line) is up 20% this year. The big Italian stock fund (aka EWI, the blue line) is down 21% this year. It’s another chapter in the big “Asia up, the West not so much” story.
– Brian Hunt
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Source: Market Notes
