Market Commentary Q1 2024

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A Global Perspective, Part Two

In last quarter’s commentary, we discussed how challenging it is to forecast which country’s stock market will outperform by looking at past returns but noted our client portfolios are allocated across the globe in bonds and stocks to potentially capture higher returns where they appear. Not only does the sheer number of overseas stocks broaden the investing landscape for our clients but they also offer the opportunity for factor investing, or focusing on those types of companies history has shown are persistent drivers of returns, such as Smaller Companies and Value. (Value stocks are shares of a company that appears to trade at a lower price relative to its fundamentals.)

The international funds in our client portfolios have benefited from these international factor exposures. Given the recent headline-grabbing performance of Large-Capitalization Growth stocks in the technology sector, investors can often overlook the strides Value and Small-Capitalization stocks have made during the past three years. Figures 1 and 2 are courtesy of Dimensional Fund Advisors, pioneers in factor investing, and show by region the one- and three-year performance differences of Value minus Growth stocks and Small-Capitalization minus Large-Capitalization stocks. Factor investing, particularly Value, was successful in overseas stocks during both time frames. Additionally, emerging market stocks had the largest margins of outperformance.   

The benefits of global diversification and factor investing may offer a valuable opportunity to help enhance your investment strategy. 

Figure 1

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Figure 2

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At Brown Financial, our approach emphasizes the importance of global allocation and factor-based strategies that have demonstrated resilience to help our clients pursue long-term financial success. Learn more about our investment philosophy and how it may be able to benefit your portfolio.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses and returns current to the most recent month-end are available from Dimensional at (512) 306-7400 or by visiting

Selection of funds, indices and time periods presented chosen by advisor. Fama/French indices used for Value vs Growth are: US Large Value, US Growth, Intl Value, Intl Growth, EM Value, and EM Growth. Indices used for Small vs Large are: Dimensional US Small Cap, S&P 500, Dimensional Intl Small Cap, MSCI World ex USA Growth, Dimensional EM Small, and MSCI EM.

Performance for periods greater than one year are annualized unless specified otherwise. Indices are not available for direct investment and performance does not reflect expenses of an actual portfolio. Performance data shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Average annual total returns include reinvestment of dividends and capital gains. Mutual funds distributed by DFA Securities LLC.

The foregoing content reflects the opinions of Brown McLeod, Inc. and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. All tax, legal, investment and other strategies should be discussed with the appropriate professional prior to implementation.

Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.

Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.

Posted in Market Commentary