While ex-US equities are now outperforming, one global investing specialist highlights the many ways this moment differs from the last great global market boom
Each month at WP we offer a slate of articles and content pieces that go deep on a particular topic. This March we’re focusing on global markets.
Tyler Mordy is quick to point out that, when it comes to investing, “narrative follows price.” The CEO & CIO of Forstrong Global Asset Management tells the story of a veteran stockbroker who was once asked what it was like working in 1982, a year that would later be recognized the beginning of a historic bull run. His response: “I didn’t know what 1982 was until 1985.” When it comes to heady moments in global markets, those narratives only fully bake after the trend is well established. The issue for investors, though, is that when a new opportunity in markets outside North America opens up, we follow the playbook of the last big narrative and miss what’s new.
In Mordy’s view, that may be happening again today. The last great era for global investing ran roughly between 2002 and 2011. That period, which followed the bursting of the dot com bubble, was all about globalization and the rise of China. Over that decade, China moved half a billion people from rural areas into cities, industrialized at a historic pace, and drove a powerful commodity supercycle. Investors rushed into emerging markets, moving steadily up the risk curve to capture the growth story.
What followed was a long reversal. From roughly 2012 to 2024, global equities lagged US markets dramatically, as American technology companies came to dominate global indices. But since 2024, many markets outside America have begun to outperform again — and Mordy argues the story behind this cycle is very different.
“International markets have been smoking U.S. markets for almost a year and a half. The stories always come out later to justify the price, but this time the move looks much more government-led,” Mordy explains. “There’s a growing recognition that the world is deglobalizing — and policy is backing it up,” Mordy says. “Across Europe, Asia, and emerging markets there’s a huge public appetite for governments to do more, whether it’s infrastructure, technology, defense, or healthcare.”
That shift represents a stark contrast with the previous global cycle. “The boom in the 2000s was powered by China’s enormous demand,” Mordy says. “The 2020s look different. This time the catalyst is fiscal expansion and the supply responses from industrial policy happening outside the United States.”
European and Japanese stimulus have been two of the core drivers for this moment in global markets. Stimulus has aimed at re-industrialization and defense spending, in what Mordy and his team call the “revenge of the real economy.” Even AI buildouts across the globe are proving themselves an industrial process in service to digital aims, driving appreciation for stocks in Europe and Japan that serve these industrial aims, as well as commodity producers in regions like Latin America.
The last global cycle, with all its focus on the rise of China’s middle class and emerging market growth, may have felt more dramatic than this moment. But Mordy argues the current cycle may ultimately prove more durable, precisely because it is less concentrated in a single country. Instead, the world is moving toward what he describes as a more multipolar economic landscape.“ As geopolitical competition and risk increases, regions are becoming less specialized and more self-sufficient,” Mordy explains. “That means investing in their own industrial capacity, supply chains, and security.”
Canadian investors and advisors are now seeing this case for global exposure again. Anecdotally, Mordy shares that his firm has seen record interest in global strategies over the past 12 months. But for advisors coming back to global markets after 12 years focused on the United States, there are some pitfalls to avoid.
The first mistake in Mordy’s view is relying solely on broad Emerging Markert index strategies. Many of those indices still overrepresent the winners from the last major global cycle. Lots of technology and lots of Chinese exposures, rather than commodities and reindustrializing regions. The second mistake would be abandoning U.S. technology entirely. “This isn’t about selling everything in the U.S. and buying the rest of the world,” Mordy says. “It’s about where the next marginal dollar goes.”
Latin America offers a good example of how index construction can obscure opportunity. The entire region accounts for only about seven per cent of the main emerging market benchmark, despite being one of the world’s most important commodity-producing regions. From Chilean copper to Brazilian agriculture, Latin America plays a critical role in global supply chains. But because the region has little exposure to large technology companies, the dominant winners of the past decade, it has remained underrepresented in major indices.
For advisors returning to global markets, the challenge now is in finding what to allocate to. The menu of options has grown significantly. In 2016 there were just over 300 ex-North America ETF strategies listed on Canadian and US exchanges. Now there are 765. Much of that explosion in funds only occurred over the past two years, as well. Advisors may be comfortable picking stocks in North America, but even selecting between broad ETF strategies for global markets may be a challenge. Mordy believes that in this moment advisors should seek managers with global expertise who can demonstrate expertise and provide support.
“We want to keep clients in their seats when geopolitical events like the current one start dominating the headlines,” Mordy says. “The key is helping them understand where we are in the cycle and which global trends are most durable.” Traditional due diligence still matters, evaluating a manager’s process, team, and track record, but Mordy believes something else is just as important.
“Ultimately,” he says, “clients want a macro framework that helps them make sense of the noise and gives them the confidence to stay invested.”
