Partner Insight: Is US equity dominance set to continue?

clock • 1 min read

Exceptional conditions rarely persist indefinitely, but this broad-based conviction in prolonged US exceptionalism has investing asking: How long can it last and how can contrarian investors prepare for mean reversion?

Nick Clay, Portfolio Manager, Redwheel, believes it is now starting to fade. "Assuming mean reversion of excesses still holds true: reversion in excessive valuations, excessive concentration, and fiscal largess. Then we believe there is a need to refocus away from a "markets always go up" narrative," he says.

A more realistic outlook is one of increased volatility, most likely a return of inflation, a broadening away from the US, and most importantly, away from an obsession with capital returns alone driving their total return.

History shows that excesses—whether in valuation, concentration, or fiscal conditions—eventually correct. This is a case for a disciplined approach to total return investing.

"Discipline will be required on valuations and on downside capture rather than upside. As we anticipate the compounding of a dividend, it becomes, once again, the dominant driver of one's total return over the next 10 years," says Nick.

1, 2 Source: Bloomberg, as at 1 June 2025

Watch the video below to learn more

More on Partner Insight

Partner Insight: It is time for investors to "own their yield, not rent it in cash."

Partner Insight: It is time for investors to "own their yield, not rent it in cash."

Lee Dineen offers insights that could reshape how we think about fixed income in portfolios

PIMCO
clock 29 May 2025 • 2 min read
Partner Insight: Reshaping how we think about fixed income in portfolios

Partner Insight: Reshaping how we think about fixed income in portfolios

Lee Dineen offers insights that could reshape how we think about fixed income in portfolios

PIMCO
clock 22 May 2025 • 2 min read
Event Voice - Emerging Markets: Your Gateway to Smarter Returns

Event Voice - Emerging Markets: Your Gateway to Smarter Returns

Eoghan McDonagh, Senior Portfolio Manager at Allianz Global Investors discusses their fund at the recent Channel Islands Summit.

Eoghan McDonagh, Senior Portfolio Manager, Allianz Global Investors
clock 16 April 2025 • 9 min read
Trustpilot