September 04, 2025
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.
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.
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