US outperformance has led to underallocation to international equities

Year to date, international equities are outperforming US equities. However, the average client allocation to non-US equities remains relatively modest.

The charts below highlight Morningstar categories’ lower exposure to emerging markets (EM) and international equities as a percentage of overall equity exposure – which we use here as a proxy for US investor allocations – when compared with their respective weights in the MSCI ACWI Index.

The underallocations to EM and international equity assets of 8 and 14 percentage points, respectively, are notable, representing an opportunity to increase exposure.

US equties versus international equities exposure as % of overall charts

Sources: FactSet, MSCI, Morningstar. Data as of June 30, 2025. Charts compare the assets of the Morningstar Diversified Emerging Markets category and all Morningstar International Equity categories as a % of overall equity assets versus the EM and international equity weightings within the MSCI ACWI Index. The MSCI ACWI (All Country World Index) represents large- and mid-cap stocks across developed and emerging markets worldwide. The index covers approximately 85% of the global investable equity opportunity set.

What this means for investors

Many investor portfolios have become light on non-US positioning as a result of international equities’ underperformance over the past several years.

However, the weakening US dollar, structural improvements in local economies, and the evolving EM landscape may offer fresh opportunities to add growth and diversification benefits in global allocations.


On April 21, 2025, Macquarie Group Limited and Nomura Holding America Inc. (Nomura) announced that they had entered into an agreement for Nomura to acquire Macquarie Asset Management’s US and European public investments business, which comprises Delaware Management Company, a series of Macquarie Investment Management Business Trust, and certain of its affiliates. The transaction is subject to customary closing conditions, including the receipt of applicable regulatory and shareholder approvals. Subject to such approvals and the satisfaction of these conditions, the transaction is expected to close by the end of 2025.

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus and summary prospectus, which may be obtained by visiting macquarie.com/mam/literature or calling 800 523-1918. Investors should read the prospectus and summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.

The views expressed represent the investment team’s assessment of the market environment as of August 2025 and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice.

Market risk is the risk that all or a majority of the securities in a certain market – like the stock market or bond market – will decline in value because of factors such as adverse political or economic conditions, future expectations, investor confidence, or heavy institutional selling.

International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.

Charts shown throughout are for illustrative purposes only and not meant to predict actual results.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.

The Morningstar Diversified Emerging Markets Category compares funds that tend to divide their assets among 20 or more nations but tend to focus on the emerging markets of Asia and Latin America rather than on those of the Middle East, Africa, or Europe. These funds invest predominantly in emerging market equities, though some invest in both equities and fixed income investments from emerging markets.

© 2025 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

All third-party marks cited are the property of their respective owners.

[4789511] 08/2025