ClearBridge International Value Strategy Q4 2024 Commentary

2025-01-22 05:40:00 ET

Summary

• The ClearBridge International Value Strategy underperformed its MSCI EAFE benchmark during the fourth quarter.
• International markets broadly retreated during the quarter due to political uncertainties in the U.S. and Europe and a strong rally by the U.S. dollar following a hawkish rate cut by the Fed.
• The Strategy traded down alongside its benchmark index in the fourth quarter as idiosyncratic headwinds to our IT holdings overcame positives in the industrials and financials sectors.
• Stocks that combine high cash yields with strong pricing power enable earnings growth even in a high-interest-rate and inflationary setting, enhancing the defensibility and resilience of our portfolio.

By Sean Bogda, CFA | Grace Su | Jean Yu, CFA, PhD

Political Uncertainty Spurs International Selloff - Fourth Quarter 2024

Market Overview

International equities struggled during the fourth quarter due to concerns that the re-election of U.S. President Donald Trump could spark tariff wars, political instability in Europe and a stronger U.S. dollar following a hawkish rate cut from the Fed. However, a market broadening following a post-election rally in the U.S. offered a measure of resilience to value equities, which outperformed growth, with the MSCI EAFE Value Index returning -7.12% versus -9.10% for the MSCI EAFE Growth Index and -8.11% for the MSCI EAFE Index. (Exhibit 1)....

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