Allocator's Perspective (International Equities) - August 2025

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Summary

In this episode of Money Matters, Chad Larson speaks with Andrew Cox, Senior Portfolio Manager at Guardian Capital, about why international equities are increasingly attractive in today’s market. Cox explains how diversification beyond the U.S. offers compelling value, improved fundamentals, and exposure to global growth themes.

Highlights

• International equities provide essential diversification beyond the concentrated U.S. market.
• Guardian Capital applies a disciplined quadrant system balancing valuation and growth.
• High-conviction portfolios focus on 15–30 carefully selected global companies.
• Strategic exposure to defence, infrastructure, and energy transition sectors.
• Japan’s corporate governance reforms are unlocking new investment opportunities.
• Rigorous sell discipline and risk management preserve portfolio quality.
  

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Key Insights

1. Global Diversification Reduces Concentration Risk

International markets—particularly in Europe and Asia—offer lower correlation with North America, balancing portfolios dominated by U.S. mega-cap tech stocks. This geographic and sectoral diversification helps mitigate risk while enhancing return potential.

2. Discipline Drives Quality and Conviction

Guardian’s quadrant system identifies companies with below-market valuations and above-market growth prospects. By combining systematic screening with deep fundamental research, the firm builds concentrated, conviction-based portfolios that focus on quality and capital protection.

3. Structural Global Trends Create Lasting Opportunities

Major macro themes—defence modernization, infrastructure renewal, and the global energy transition—are fuelling demand for companies positioned in these sectors. Regions such as Japan and Europe are benefiting from policy shifts and innovation, creating fertile ground for long-term investors.

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Conclusion

This episode underscores that international equities are not merely a diversification tool but a gateway to distinctive global opportunities. With disciplined management and a focus on enduring trends, investors can tap into the next wave of global growth beyond North American borders.

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