Strategists cite attractive valuations and momentum in developed markets outside the U.S. as key drivers of recent gains.
International stocks have extended their outperformance over U.S. equities this year, building on 2023’s gains. The Invesco S&P International Developed Momentum ETF (IDMO) tracks 192 high-momentum stocks from developed markets, excluding the U.S. and South Korea, with Japan and Canada leading allocations at 22% and 16%, respectively.
The ETF’s underlying index, the S&P World Ex-U.S. Momentum Index, selects stocks based on recent price strength from a broader pool of 1,000 large- and mid-cap international equities. Analysts attribute the trend to a weakening dollar, infrastructure spending, and lower valuations compared to U.S. peers.
No immediate market reaction data was provided, but the shift underscores growing investor interest in non-U.S. diversification.