Charting our Focus

 International Stocks at a Steep Discount to US Stocks

Many international markets trade at a valuation discount, while the S&P 500 and US Growth trade at a valuation premium.

We believe international equities are attractively valued and offer a path forward for investors concerned about the high valuations in parts of the US equities market

• For years, US stock market returns have largely dominated global stock market returns, but this dominance has come with a progressively higher price tag. As of the end of August 2023, US equities (as measured by the forward price-to-earnings (P/E) ratio of the S&P 500 Index), traded at a 51% premium to international equities (as measured by the MSCI EAFE Index) – 20.6x vs.13.7x earnings, respectively. (Inversely, that’s a 34% discount to US equities.)

• In addition, investing internationally in stocks with cheaper valuations can expand the opportunity set by considering and incorporating catalysts for change. For example, in Japan, generational changes in company management at the personnel level are leading to an increased focus on unlocking corporate value. And in Europe, financial institutions have rebuilt their balance sheets, are better capitalized than their US counterparts, and, in our analysis, are able to focus on share buybacks and dividends*.
• Another potential catalyst that could help non-US stocks perform is a style rotation from growth to value. In the current environment, markets have experienced increasing interest rates and inflation, conditions that tend to favor value sectors including financials and energy. Non-US markets stand to benefit as international indices are more heavily weighted towards value and less towards growth sectors, such as information technology.

Terms and Indices

Active investing: Using expertise and analysis to select investments based on an independent assessment of their worth, with the goal of outperforming a standard benchmark.

STOXX Europe 600 Index: Represents large, mid and small capitalization companies across the European region.

MSCI EAFE (Europe, Australasia, and Far East) Index: A commonly used measure of international stocks.

S&P 500: The S&P 500 broad measure of large-cap US equities and serves as the foundation for a wide range of investment products. 

Price/Earnings ratio (P/E): A valuation measure of expensiveness using a stock’s price divided by its per-share earnings

Indices are unmanaged and their returns assume reinvestment of dividends and do not reflect any fees or expenses. It is not possible to invest directly in an index.

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of 9/30/2023.

*Dividends are not guaranteed.

A Word About Risk: Pioneer Global Sustainable Equity Fund

The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues or adverse investor sentiment.Investing in foreign and/or emerging markets securities involves risks relating to interest rates, currency exchange rates, economic, and political conditions.The Fund generally excludes corporate issuers that do not meet or exceed minimum ESG standards. Excluding specific issuers limits the universe of investments available to the Fund, which may mean forgoing some investment opportunities available to funds without similar ESG standards.The Fund is subject to currency risk, meaning that the Fund could experience losses based on changes in the exchange rate between non-US currencies and the US dollar.The market price of securities may fluctuate when interest rates change. When interest rates rise, the prices of fixed income securities in the Fund will generally fall. Conversely, when interest rates fall, the prices of fixed income securities in the Fund will generally rise.The Fund may use derivatives, which may have a potentially large impact on Fund performance.

A Word About Risk: Pioneer International Equity Fund

The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues or adverse investor sentiment. Investing in foreign and/or emerging markets securities involves risks relating to interest rates, currency exchange rates, economic, and political conditions. To the extent the Fund invests in issuers located within specific countries or regions, the Fund may be particularly affected by adverse markets, rates, and events, which may occur in those countries and regions. The Fund is subject to currency risk, meaning that the Fund could experience losses based on changes in the exchange rate between non-US currencies and the US dollar. The market price of securities may fluctuate when interest rates change. When interest rates rise, the prices of fixed income securities in the Fund will generally fall. Conversely, when interest rates fall, the prices of fixed income securities in the Fund will generally rise.

The views expressed regarding market and economic trends are those of Amundi Asset Management US, Inc. ("Amundi US"), and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any portfolio.

Investing in mutual funds involves significant risks. For complete information on the specific risks associated with each fund, please see the appropriate fund’s prospectus or fact sheet, available on our  literature page.

Individuals are encouraged to seek advice from their financial, legal, tax and other appropriate professionals before making any investment or financial decisions or purchasing any financial, securities or investment-related product or service, including any product or service described in these materials. Amundi US does not provide investment advice or investment recommendations.

Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your financial professional or Amundi US for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it from our  literature section.

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