Updated March 28, 2025
Diversification Across US and European Stock Markets in a Less Globalized World: What It Means for Investors Today
Diversification Across US and European Stock Markets in a Less Globalized World: What It Means for Investors Today
Diversification Across US and European Stock Markets in a Less Globalized World: What It Means for Investors Today
AJ Giannone, CFA
The Macroscope
Diversification Across US and European Stock Markets in a Less Globalized World: What It Means for Investors Today
Ex-US markets have outperformed to begin 2025 and Trump 2.0
We make the case the US is the cradle of capitalism, and over-allocating to Europe may not be a wise long-term allocation decision
In the near term, Europe boasts a lower P/E, higher EPS growth rate, and larger dividend yield, but structural challenges remain
Investing internationally has received significant blowback in recent years. For good reason—the S&P 500 Total Retur
n Index (SPXTR) has soared more than 550% in the past decade and a half compared with just a 120% total return in ex-US equities (as measured by the Vanguard FTSE All World ex-US Index ETF (VEU)). Our portfolio management team constantly analyzes and dissects returns at home and abroad, and we are not afraid to buck the consensus when we deem it appropriate.
We also take the long view. Allio believes the US attracts financial flows and breeds innovation, whereas regions like Europe are less conducive to capital formation, risk-taking, and freedom writ large. So, while there’s a valuation gap favoring Euro Area stocks today, in our view, foreign alpha may be difficult to sustain over the long term.
It’s also apparent that the world is becoming less globalized after years of supposedly working together on complex issues facing the global macro economy. We assert that may produce a favorable backdrop for diversified investors seeking to reduce overall portfolio volatility—less correlated markets can potentially reduce an allocation’s standard deviation.
There are other forces at play today. It is a unique time for portfolio managers and individual investors alike. With European markets boasting their best start to a year compared with the S&P 500 in decades, pausing and assessing the macro landscape is helpful. It’s all about thinking differently to invest smarter—a hallmark of what we do at Allio.
The Benefits of Geographic Diversification
Old-school financial advice calls for equity exposure across countries and continents to reduce portfolio volatility. As academic finance reads, investors can minimize portfolio swings and mitigate risks tied to any single market by spreading capital across regions with different economic cycles, political landscapes, and market dynamics.
That worked from the 1970s through the 2008 Great Financial Crisis (GFC). Shares of foreign companies and domestic stocks took turns outperforming, one giving way to the other after five or 10 years of relative alpha. The trend appeared to change post-GFC, however. The S&P 500, led by large-cap growth and the rise of tech-related stalwarts like Apple (AAPL), Microsoft (MSFT), and, more recently, NVIDIA (NVDA), took charge amid a strengthening US Dollar Index (DXY).
Rolling Periods of US/Ex-US Outperformance
Source: Hartford Funds
Year by year since the GFC, investors began to dismiss the “go-global” approach, opting for a 100% US allocation. That surely pleased the late John Bogle, Vanguard Group founder. The ultimate index investor, Bogle made the case that US investors could get their fill of foreign exposure simply by owning US large caps since those companies generate significant sales overseas. Others contend that factors like currency risks, political uncertainty, and generally less favorable business conditions should lead investors home to a US-centric strategy.
Allio sees value in having some ex-US stock market exposure, but it’s important not to overdo it. We also believe cycles can prompt periods of international outperformance, as history indicates, but the long-run return construct points to better performance from US shares.
It’s possible that the years and decades ahead could see a reversion to relative returns seen from the 1970s through the early 1990s—before the effects of globalization took hold. The golden age of US investing arguably began after the Japanese stock market bubble burst—since 1990, the US market has generated a compounded annual rate of return (CAGR) of 10.4% compared to just a 4.2% CAGR for global ex-US shares.
A six-percentage-point gap is massive for your long-term portfolio return. A $100,000 initial investment growing at 4.2% annually for 30 years turns into $344,000, only marginally outpacing inflation. A 10.4% CAGR over three decades yields a whopping $1.95 million nest egg.
Hindsight is 20/20, though, and the past is not prologue in markets. While the US has beaten international equities in 22 of the past 36 years, there could be a near-term catch-up trade among foreign equities, particularly those in the Euro Area.
US and Ex-US Annual Returns Since 1986
Source: Portfolio Visualizer
The Short-Term Nature of European Outperformance
Zoom in on Europe; you will find major recent alpha across the pond. Year-to-date through March 14, VGK was up 14.2% compared to the SPXTR’s 3.9% decline. It's VGK’s best start to a year since its inception over two decades ago. Other European index funds’ performance reveals that the region is off to its hottest return through mid-March in any year this century.
Driving VGK’s strong absolute and relative performance are myriad factors. Maybe the most important is not fundamental to economics and global macro issues at all. We’re talking about positioning. “US exceptionalism” became a common phrase in the financial media, and investors seemed to throw in the towel on the whole international diversification thing.
Furthermore, the re-election of President Trump only fueled US fervor—the prospect of tariffs, deregulation, and lower US taxes was the dynamic trio of bullish factors that many market participants gravitated towards to reinforce their US-centric portfolios as the only way to go. Hence, behavioral factors, including confirmation bias and herd behavior, were crucial.
US Equity Positioning Soared After the 2024 Election
Source: BofA Global Research
Recent Flows Favor Europe. Largest 5-Week Inflow in a Decade, per EPFR
Source: Macrobond
Along with investors caught offsides with positioning, there was a foul on the currency front. EURUSD neared parity, a psychologically important level. Days before Trump was sworn in for the second time, the euro dipped under $1.02, its weakest mark since late 2022. For US investors, a weakening foreign currency generally leads to soft ex-US returns compared to the domestic market. Conversely, ex-US funds tend to outperform during a weaker dollar environment, but it’s not a sure thing.
So far in 2025, EURUSD has climbed by more than 5%, essentially a five-percentage-point tailwind for holding dollar-denominated European funds. Macro investors must recognize that currency movements are often cyclical and influenced by short-term factors like interest rate differentials and market sentiment rather than sustainable trends. So, don’t fall in love with the rising-euro theme just yet.
EURUSD Holds the Parity Level, Rallies in 1Q25
Source: TradingView
A third factor helping cast Europe in a rosy light is anticipated earnings growth. According to the current consensus numbers, the Euro Area’s bottom-line growth rate is seen rising by 10%, about three percentage points better than the S&P 500’s CY 2025 EPS increase. So, we could see more substantial corporate earnings growth in Europe, but it must be contextualized.
President Trump has pressured European lawmakers to step up their defense-spending game. For decades, particularly during the globalization era, the US footed much of the world’s military bill, as we acted as the international police. That may be changing. Though there are key differences, so far, between Trump 1.0 and 2.0, one thing has not changed: America First. The president wants to see other nations (and their taxpayers) pull their own weight regarding defense investments. One of the results is a fresh set of stimulus measures, particularly from the defense-heavy German economy. Now, 50-plus years ago, Germany beefing up its military prowess may not have been the most exciting international development, but times change, of course.
The US Has Carried the Global Defense Spending Load in Recent Decades
Source: Morningstar
US Exceptionalism Was Built on Massive Government Spending Compared to Europe
Source: BofA Global Research
For the Euro Area as a whole, the Solactive GS EU Defense Index illustrates just how much military spending could increase. The chart below shows the price returns of a basket of prominent industrial names associated with EU defense, and it has soared from under 100 when Trump was re-elected to above 190 as of March 14—a near double in barely more than four months. If price action is any indicator, Europe is about to don their “big-boy pants,” as we dubbed it in a recent Macro Calendar blog.
The Solactive GS EU Defense Index Goes Parabolic in 2025
Source: Solactive
To review, investors were caught off guard by a European market snapback, the euro currency was oversold, and the hefty amount of EU defense spending acts as a stimulus of sorts for the entire continent (which happens to coincide with a period of potential austerity in the US due to DOGE).
A fourth factor is valuation. Even after the early-2025 European heater, the region trades at just 14.0 times forward earnings estimates as of mid-March. The US, on the other hand, sells for a 20.7x forward P/E. Now, since tech and other high-growth sectors command high weights in the US stock market, it makes sense for the S&P 500 to feature a premium earnings multiple, but the gap is unusually high.
Pair the P/E view with the aforementioned profit growth rate estimates this year, and the PEG ratios clearly favored Europe coming into 2025. Thus, that gap is being filled somewhat, and it’s quite possible the trend will continue in the quarters ahead. What’s more, Europe’s equity risk premium—the earnings yield minus the real risk-free Treasury rate—is about a point and a half higher than the US’.
Those seeking diversification may also appreciate that the Euro Area is much less concentrated than the S&P 500.
Europe is Temporarily Cheaper than the US on a Sector-Neutral Basis
Source: Goldman Sachs
VGK Less Top-Heavy than the Mag 7-Heavy SPX
Source: Vanguard Group
There are other x-factors at play, too. Europe’s economic recovery, while tepid after the energy crisis following the Russia-Ukraine conflict, provides a tailwind for the three European bourses (FTSE 100, Xetra DAX, CAC 40), but structural issues such as bureaucratic bloat, demographic challenges, and slower innovation adoption temper Allio’s long-term optimism about the continent. While lower, the US’ 7% EPS growth is built on consistent economic expansion, technological leadership, and a more flexible labor market.
These macro realities are reflected in recent monetary policy signals and actions from the Fed and the European Central Bank (ECB). In March, the Federal Open Market Committee (FOMC) held its interest rate unchanged, reflecting a cautious approach with high tariff uncertainty and inflation still hovering materially above its 2% target. Conversely, the ECB met two weeks before the FOMC and cut its main interest rate by a quarter point. It remains to be seen how recent stimulus news in the Euro Area will impact inflation and what the Fed’s response might be. Structurally higher rates in Europe may help support the euro. Currency parity chatter could wane in the years ahead, particularly if Treasury Secretary Bessent and President Trump have their way with lower intermediate-term yields.
Why the US Remains More Conducive to Capitalism
If the P/E gap goes from, call it, seven to just three, that would imply the potential for 20% of additional European alpha this year. Toss in 1.6 percentage points of additional dividend return and three points of extra earnings, and it could be a great 2025 for VGK. It's a gaudy sum, for sure, but it does not change the long-term reality that for investors seeking exposure to the most innovation-driven, capitalistic market environment, the U.S. remains a strong candidate.
Despite all the red tape (that DOGE strives to cut), our country fosters an environment where businesses, big and small, can thrive—several factors back that up. First, the US boasts a dynamic entrepreneurial ecosystem—look no further than what comes out of Silicon Valley. Our penchant for innovation drives productivity and attracts global capital. The U.S. work culture tends to emphasize productivity and innovation, contributing to a dynamic business environment.
Second, the US benefits from lighter business regulations than Europe, which is a horror if you want to build a venture from scratch. The European Union’s patchwork of national laws is highly complicated, crowding out new forms of capitalism. This fragmentation stifles growth and deters investment in Europe, as companies face higher compliance costs and slower decision-making.
Third, the US labor market is known for its flexibility, allowing firms to adapt quickly to economic shifts, and we have seen that play out in recent cycles. “US exceptionalism” took off in the wake of COVID as American workers found new ways to get “stuff” done (for lack of a better word). Europe, by contrast, often grapples with rigid labor laws and higher social welfare costs, which can weigh on corporate profitability.
Fourth, part and parcel of a thriving capitalistic environment is access to capital for growing businesses. Both young and established companies have a clear advantage stateside compared to heavily regulated European funding arenas. Hence, the total dollar value of assets invested in the US equity market far exceeds that in Europe. Moreover, venture capital, growth equity, and private equity risk-taking in the US dwarf funding in Europe. Drilling down further, an appetite for investing in domestic startups leads to growing the American economic pie, reinforcing the US as a powerhouse across all business sizes.
Finally, let’s revisit Europe’s high dividend yield. It looks great on paper, but it proves that US companies are wont to aggressively reinvest profits on expansion projects, such as research and development, significant capital investments, or the hiring of new workers. European conglomerates take a more conservative approach that prioritizes income over growth, complacency over proactiveness. While this appeals to certain investors, it suggests a lack of confidence in high-growth opportunities within Europe.
Applying Ray Dalio’s Principles to the Continental Divide
Investors can look to Dalio for insights on the US-European market dynamic.
Principle 1: Understand the Big Picture Through Economic Cycles
Near-term bullishness toward Europe may be warranted due to where we are in the business and debt cycles. You see, the Euro Area went through an austerity process during and after the Greek debt crisis in 2011. The region may now be in the earlier phases of the business cycle in which investments are made and debt is increased. The US, by contrast, could be in a less favorable cycle stage as we look to tackle our incredible federal debt burden. The P/E and EPS growth views further support the premise that Europe is in the earlier stages of recovery.
Dalio’s framework suggests that while Europe may offer tactical opportunities due to its cyclical position, domestic structural advantages make the US a better long-term bet. As always, closely monitoring macro determinants is key to pouncing on important changes between asset classes.
Principle 2: Diversify to Manage Risk
Dalio’s mantra of diversification aligns with the case for allocating both at home and abroad. He describes the “Holy Grail of investing”—creating a portfolio of 15-20 uncorrelated return streams to reduce risk without sacrificing returns. As globalization wanes, the potential for declining correlations between US and European markets fits this principle perfectly.
For example, investors can reduce portfolio volatility by holding both domestic growth stocks and European value stocks. Dalio’s all-weather portfolio, a mix of stocks, bonds, and commodities, is another allocation approach. Allio believes in spreading risk across stocks, bonds, interest-earning cash, commodities, real estate, gold, or cryptocurrency to best reap diversification’s benefits, but erring on the US side of the pond still looks favorable.
Principle 3: Don’t Bet on What’s Already Priced In
Dalio warns against chasing trends that are already reflected in asset prices. Europe’s recent alpha, partly driven by the EURUSD rally and cyclical earnings growth, may already be priced into current valuations to an extent.
On the flip side, the US’ higher P/E ratio is a sentiment barometer of sorts, reflecting long-run optimism about the domestic economy. Investors should be cautious about over-allocating to Europe simply because of its recent strength; momentum is real, but performance-chasing too often ends in tears.
Principle 4: Balance Risk Across Environments
All-weather investing involves balancing portfolios across different economic environments (e.g., growth, inflation, stagnation). US and European markets offer complementary exposures: We thrive in high-growth environments.
Europe’s higher dividend yield and lower valuations provide stability during downturns, usually doing better when the value style is in vogue (think: 2000-2009). By carefully blending these exposures, investors can create a more resilient portfolio throughout cycles, as Dalio advocates.
The Bottom Line
European stocks have soared to begin 2025. It has fooled many investors, but we are pleased to see strength from new areas away from the Mag 7. That doesn’t change Allio’s long-standing belief that the US is the cradle of capitalism. Yes, Europe boasts a higher dividend yield, lower P/E multiple, and potentially better earnings growth this year. These are short-term trends, though, and we urge investors to heed Dalio’s principles in times like these.
We aim to pursue growth opportunities across diverse macroeconomic conditions with Allio’s Dynamic Asset Allocation strategies. Our macro-investing philosophy focuses on the powerful forces that shape markets: economics, policy, and politics. From asset classes to geographies and industries, we offer investors personalized AI-powered solutions to help them think bigger and make informed decisions when building their portfolios.
Diversification Across US and European Stock Markets in a Less Globalized World: What It Means for Investors Today
Ex-US markets have outperformed to begin 2025 and Trump 2.0
We make the case the US is the cradle of capitalism, and over-allocating to Europe may not be a wise long-term allocation decision
In the near term, Europe boasts a lower P/E, higher EPS growth rate, and larger dividend yield, but structural challenges remain
Investing internationally has received significant blowback in recent years. For good reason—the S&P 500 Total Retur
n Index (SPXTR) has soared more than 550% in the past decade and a half compared with just a 120% total return in ex-US equities (as measured by the Vanguard FTSE All World ex-US Index ETF (VEU)). Our portfolio management team constantly analyzes and dissects returns at home and abroad, and we are not afraid to buck the consensus when we deem it appropriate.
We also take the long view. Allio believes the US attracts financial flows and breeds innovation, whereas regions like Europe are less conducive to capital formation, risk-taking, and freedom writ large. So, while there’s a valuation gap favoring Euro Area stocks today, in our view, foreign alpha may be difficult to sustain over the long term.
It’s also apparent that the world is becoming less globalized after years of supposedly working together on complex issues facing the global macro economy. We assert that may produce a favorable backdrop for diversified investors seeking to reduce overall portfolio volatility—less correlated markets can potentially reduce an allocation’s standard deviation.
There are other forces at play today. It is a unique time for portfolio managers and individual investors alike. With European markets boasting their best start to a year compared with the S&P 500 in decades, pausing and assessing the macro landscape is helpful. It’s all about thinking differently to invest smarter—a hallmark of what we do at Allio.
The Benefits of Geographic Diversification
Old-school financial advice calls for equity exposure across countries and continents to reduce portfolio volatility. As academic finance reads, investors can minimize portfolio swings and mitigate risks tied to any single market by spreading capital across regions with different economic cycles, political landscapes, and market dynamics.
That worked from the 1970s through the 2008 Great Financial Crisis (GFC). Shares of foreign companies and domestic stocks took turns outperforming, one giving way to the other after five or 10 years of relative alpha. The trend appeared to change post-GFC, however. The S&P 500, led by large-cap growth and the rise of tech-related stalwarts like Apple (AAPL), Microsoft (MSFT), and, more recently, NVIDIA (NVDA), took charge amid a strengthening US Dollar Index (DXY).
Rolling Periods of US/Ex-US Outperformance
Source: Hartford Funds
Year by year since the GFC, investors began to dismiss the “go-global” approach, opting for a 100% US allocation. That surely pleased the late John Bogle, Vanguard Group founder. The ultimate index investor, Bogle made the case that US investors could get their fill of foreign exposure simply by owning US large caps since those companies generate significant sales overseas. Others contend that factors like currency risks, political uncertainty, and generally less favorable business conditions should lead investors home to a US-centric strategy.
Allio sees value in having some ex-US stock market exposure, but it’s important not to overdo it. We also believe cycles can prompt periods of international outperformance, as history indicates, but the long-run return construct points to better performance from US shares.
It’s possible that the years and decades ahead could see a reversion to relative returns seen from the 1970s through the early 1990s—before the effects of globalization took hold. The golden age of US investing arguably began after the Japanese stock market bubble burst—since 1990, the US market has generated a compounded annual rate of return (CAGR) of 10.4% compared to just a 4.2% CAGR for global ex-US shares.
A six-percentage-point gap is massive for your long-term portfolio return. A $100,000 initial investment growing at 4.2% annually for 30 years turns into $344,000, only marginally outpacing inflation. A 10.4% CAGR over three decades yields a whopping $1.95 million nest egg.
Hindsight is 20/20, though, and the past is not prologue in markets. While the US has beaten international equities in 22 of the past 36 years, there could be a near-term catch-up trade among foreign equities, particularly those in the Euro Area.
US and Ex-US Annual Returns Since 1986
Source: Portfolio Visualizer
The Short-Term Nature of European Outperformance
Zoom in on Europe; you will find major recent alpha across the pond. Year-to-date through March 14, VGK was up 14.2% compared to the SPXTR’s 3.9% decline. It's VGK’s best start to a year since its inception over two decades ago. Other European index funds’ performance reveals that the region is off to its hottest return through mid-March in any year this century.
Driving VGK’s strong absolute and relative performance are myriad factors. Maybe the most important is not fundamental to economics and global macro issues at all. We’re talking about positioning. “US exceptionalism” became a common phrase in the financial media, and investors seemed to throw in the towel on the whole international diversification thing.
Furthermore, the re-election of President Trump only fueled US fervor—the prospect of tariffs, deregulation, and lower US taxes was the dynamic trio of bullish factors that many market participants gravitated towards to reinforce their US-centric portfolios as the only way to go. Hence, behavioral factors, including confirmation bias and herd behavior, were crucial.
US Equity Positioning Soared After the 2024 Election
Source: BofA Global Research
Recent Flows Favor Europe. Largest 5-Week Inflow in a Decade, per EPFR
Source: Macrobond
Along with investors caught offsides with positioning, there was a foul on the currency front. EURUSD neared parity, a psychologically important level. Days before Trump was sworn in for the second time, the euro dipped under $1.02, its weakest mark since late 2022. For US investors, a weakening foreign currency generally leads to soft ex-US returns compared to the domestic market. Conversely, ex-US funds tend to outperform during a weaker dollar environment, but it’s not a sure thing.
So far in 2025, EURUSD has climbed by more than 5%, essentially a five-percentage-point tailwind for holding dollar-denominated European funds. Macro investors must recognize that currency movements are often cyclical and influenced by short-term factors like interest rate differentials and market sentiment rather than sustainable trends. So, don’t fall in love with the rising-euro theme just yet.
EURUSD Holds the Parity Level, Rallies in 1Q25
Source: TradingView
A third factor helping cast Europe in a rosy light is anticipated earnings growth. According to the current consensus numbers, the Euro Area’s bottom-line growth rate is seen rising by 10%, about three percentage points better than the S&P 500’s CY 2025 EPS increase. So, we could see more substantial corporate earnings growth in Europe, but it must be contextualized.
President Trump has pressured European lawmakers to step up their defense-spending game. For decades, particularly during the globalization era, the US footed much of the world’s military bill, as we acted as the international police. That may be changing. Though there are key differences, so far, between Trump 1.0 and 2.0, one thing has not changed: America First. The president wants to see other nations (and their taxpayers) pull their own weight regarding defense investments. One of the results is a fresh set of stimulus measures, particularly from the defense-heavy German economy. Now, 50-plus years ago, Germany beefing up its military prowess may not have been the most exciting international development, but times change, of course.
The US Has Carried the Global Defense Spending Load in Recent Decades
Source: Morningstar
US Exceptionalism Was Built on Massive Government Spending Compared to Europe
Source: BofA Global Research
For the Euro Area as a whole, the Solactive GS EU Defense Index illustrates just how much military spending could increase. The chart below shows the price returns of a basket of prominent industrial names associated with EU defense, and it has soared from under 100 when Trump was re-elected to above 190 as of March 14—a near double in barely more than four months. If price action is any indicator, Europe is about to don their “big-boy pants,” as we dubbed it in a recent Macro Calendar blog.
The Solactive GS EU Defense Index Goes Parabolic in 2025
Source: Solactive
To review, investors were caught off guard by a European market snapback, the euro currency was oversold, and the hefty amount of EU defense spending acts as a stimulus of sorts for the entire continent (which happens to coincide with a period of potential austerity in the US due to DOGE).
A fourth factor is valuation. Even after the early-2025 European heater, the region trades at just 14.0 times forward earnings estimates as of mid-March. The US, on the other hand, sells for a 20.7x forward P/E. Now, since tech and other high-growth sectors command high weights in the US stock market, it makes sense for the S&P 500 to feature a premium earnings multiple, but the gap is unusually high.
Pair the P/E view with the aforementioned profit growth rate estimates this year, and the PEG ratios clearly favored Europe coming into 2025. Thus, that gap is being filled somewhat, and it’s quite possible the trend will continue in the quarters ahead. What’s more, Europe’s equity risk premium—the earnings yield minus the real risk-free Treasury rate—is about a point and a half higher than the US’.
Those seeking diversification may also appreciate that the Euro Area is much less concentrated than the S&P 500.
Europe is Temporarily Cheaper than the US on a Sector-Neutral Basis
Source: Goldman Sachs
VGK Less Top-Heavy than the Mag 7-Heavy SPX
Source: Vanguard Group
There are other x-factors at play, too. Europe’s economic recovery, while tepid after the energy crisis following the Russia-Ukraine conflict, provides a tailwind for the three European bourses (FTSE 100, Xetra DAX, CAC 40), but structural issues such as bureaucratic bloat, demographic challenges, and slower innovation adoption temper Allio’s long-term optimism about the continent. While lower, the US’ 7% EPS growth is built on consistent economic expansion, technological leadership, and a more flexible labor market.
These macro realities are reflected in recent monetary policy signals and actions from the Fed and the European Central Bank (ECB). In March, the Federal Open Market Committee (FOMC) held its interest rate unchanged, reflecting a cautious approach with high tariff uncertainty and inflation still hovering materially above its 2% target. Conversely, the ECB met two weeks before the FOMC and cut its main interest rate by a quarter point. It remains to be seen how recent stimulus news in the Euro Area will impact inflation and what the Fed’s response might be. Structurally higher rates in Europe may help support the euro. Currency parity chatter could wane in the years ahead, particularly if Treasury Secretary Bessent and President Trump have their way with lower intermediate-term yields.
Why the US Remains More Conducive to Capitalism
If the P/E gap goes from, call it, seven to just three, that would imply the potential for 20% of additional European alpha this year. Toss in 1.6 percentage points of additional dividend return and three points of extra earnings, and it could be a great 2025 for VGK. It's a gaudy sum, for sure, but it does not change the long-term reality that for investors seeking exposure to the most innovation-driven, capitalistic market environment, the U.S. remains a strong candidate.
Despite all the red tape (that DOGE strives to cut), our country fosters an environment where businesses, big and small, can thrive—several factors back that up. First, the US boasts a dynamic entrepreneurial ecosystem—look no further than what comes out of Silicon Valley. Our penchant for innovation drives productivity and attracts global capital. The U.S. work culture tends to emphasize productivity and innovation, contributing to a dynamic business environment.
Second, the US benefits from lighter business regulations than Europe, which is a horror if you want to build a venture from scratch. The European Union’s patchwork of national laws is highly complicated, crowding out new forms of capitalism. This fragmentation stifles growth and deters investment in Europe, as companies face higher compliance costs and slower decision-making.
Third, the US labor market is known for its flexibility, allowing firms to adapt quickly to economic shifts, and we have seen that play out in recent cycles. “US exceptionalism” took off in the wake of COVID as American workers found new ways to get “stuff” done (for lack of a better word). Europe, by contrast, often grapples with rigid labor laws and higher social welfare costs, which can weigh on corporate profitability.
Fourth, part and parcel of a thriving capitalistic environment is access to capital for growing businesses. Both young and established companies have a clear advantage stateside compared to heavily regulated European funding arenas. Hence, the total dollar value of assets invested in the US equity market far exceeds that in Europe. Moreover, venture capital, growth equity, and private equity risk-taking in the US dwarf funding in Europe. Drilling down further, an appetite for investing in domestic startups leads to growing the American economic pie, reinforcing the US as a powerhouse across all business sizes.
Finally, let’s revisit Europe’s high dividend yield. It looks great on paper, but it proves that US companies are wont to aggressively reinvest profits on expansion projects, such as research and development, significant capital investments, or the hiring of new workers. European conglomerates take a more conservative approach that prioritizes income over growth, complacency over proactiveness. While this appeals to certain investors, it suggests a lack of confidence in high-growth opportunities within Europe.
Applying Ray Dalio’s Principles to the Continental Divide
Investors can look to Dalio for insights on the US-European market dynamic.
Principle 1: Understand the Big Picture Through Economic Cycles
Near-term bullishness toward Europe may be warranted due to where we are in the business and debt cycles. You see, the Euro Area went through an austerity process during and after the Greek debt crisis in 2011. The region may now be in the earlier phases of the business cycle in which investments are made and debt is increased. The US, by contrast, could be in a less favorable cycle stage as we look to tackle our incredible federal debt burden. The P/E and EPS growth views further support the premise that Europe is in the earlier stages of recovery.
Dalio’s framework suggests that while Europe may offer tactical opportunities due to its cyclical position, domestic structural advantages make the US a better long-term bet. As always, closely monitoring macro determinants is key to pouncing on important changes between asset classes.
Principle 2: Diversify to Manage Risk
Dalio’s mantra of diversification aligns with the case for allocating both at home and abroad. He describes the “Holy Grail of investing”—creating a portfolio of 15-20 uncorrelated return streams to reduce risk without sacrificing returns. As globalization wanes, the potential for declining correlations between US and European markets fits this principle perfectly.
For example, investors can reduce portfolio volatility by holding both domestic growth stocks and European value stocks. Dalio’s all-weather portfolio, a mix of stocks, bonds, and commodities, is another allocation approach. Allio believes in spreading risk across stocks, bonds, interest-earning cash, commodities, real estate, gold, or cryptocurrency to best reap diversification’s benefits, but erring on the US side of the pond still looks favorable.
Principle 3: Don’t Bet on What’s Already Priced In
Dalio warns against chasing trends that are already reflected in asset prices. Europe’s recent alpha, partly driven by the EURUSD rally and cyclical earnings growth, may already be priced into current valuations to an extent.
On the flip side, the US’ higher P/E ratio is a sentiment barometer of sorts, reflecting long-run optimism about the domestic economy. Investors should be cautious about over-allocating to Europe simply because of its recent strength; momentum is real, but performance-chasing too often ends in tears.
Principle 4: Balance Risk Across Environments
All-weather investing involves balancing portfolios across different economic environments (e.g., growth, inflation, stagnation). US and European markets offer complementary exposures: We thrive in high-growth environments.
Europe’s higher dividend yield and lower valuations provide stability during downturns, usually doing better when the value style is in vogue (think: 2000-2009). By carefully blending these exposures, investors can create a more resilient portfolio throughout cycles, as Dalio advocates.
The Bottom Line
European stocks have soared to begin 2025. It has fooled many investors, but we are pleased to see strength from new areas away from the Mag 7. That doesn’t change Allio’s long-standing belief that the US is the cradle of capitalism. Yes, Europe boasts a higher dividend yield, lower P/E multiple, and potentially better earnings growth this year. These are short-term trends, though, and we urge investors to heed Dalio’s principles in times like these.
We aim to pursue growth opportunities across diverse macroeconomic conditions with Allio’s Dynamic Asset Allocation strategies. Our macro-investing philosophy focuses on the powerful forces that shape markets: economics, policy, and politics. From asset classes to geographies and industries, we offer investors personalized AI-powered solutions to help them think bigger and make informed decisions when building their portfolios.
Diversification Across US and European Stock Markets in a Less Globalized World: What It Means for Investors Today
Ex-US markets have outperformed to begin 2025 and Trump 2.0
We make the case the US is the cradle of capitalism, and over-allocating to Europe may not be a wise long-term allocation decision
In the near term, Europe boasts a lower P/E, higher EPS growth rate, and larger dividend yield, but structural challenges remain
Investing internationally has received significant blowback in recent years. For good reason—the S&P 500 Total Retur
n Index (SPXTR) has soared more than 550% in the past decade and a half compared with just a 120% total return in ex-US equities (as measured by the Vanguard FTSE All World ex-US Index ETF (VEU)). Our portfolio management team constantly analyzes and dissects returns at home and abroad, and we are not afraid to buck the consensus when we deem it appropriate.
We also take the long view. Allio believes the US attracts financial flows and breeds innovation, whereas regions like Europe are less conducive to capital formation, risk-taking, and freedom writ large. So, while there’s a valuation gap favoring Euro Area stocks today, in our view, foreign alpha may be difficult to sustain over the long term.
It’s also apparent that the world is becoming less globalized after years of supposedly working together on complex issues facing the global macro economy. We assert that may produce a favorable backdrop for diversified investors seeking to reduce overall portfolio volatility—less correlated markets can potentially reduce an allocation’s standard deviation.
There are other forces at play today. It is a unique time for portfolio managers and individual investors alike. With European markets boasting their best start to a year compared with the S&P 500 in decades, pausing and assessing the macro landscape is helpful. It’s all about thinking differently to invest smarter—a hallmark of what we do at Allio.
The Benefits of Geographic Diversification
Old-school financial advice calls for equity exposure across countries and continents to reduce portfolio volatility. As academic finance reads, investors can minimize portfolio swings and mitigate risks tied to any single market by spreading capital across regions with different economic cycles, political landscapes, and market dynamics.
That worked from the 1970s through the 2008 Great Financial Crisis (GFC). Shares of foreign companies and domestic stocks took turns outperforming, one giving way to the other after five or 10 years of relative alpha. The trend appeared to change post-GFC, however. The S&P 500, led by large-cap growth and the rise of tech-related stalwarts like Apple (AAPL), Microsoft (MSFT), and, more recently, NVIDIA (NVDA), took charge amid a strengthening US Dollar Index (DXY).
Rolling Periods of US/Ex-US Outperformance
Source: Hartford Funds
Year by year since the GFC, investors began to dismiss the “go-global” approach, opting for a 100% US allocation. That surely pleased the late John Bogle, Vanguard Group founder. The ultimate index investor, Bogle made the case that US investors could get their fill of foreign exposure simply by owning US large caps since those companies generate significant sales overseas. Others contend that factors like currency risks, political uncertainty, and generally less favorable business conditions should lead investors home to a US-centric strategy.
Allio sees value in having some ex-US stock market exposure, but it’s important not to overdo it. We also believe cycles can prompt periods of international outperformance, as history indicates, but the long-run return construct points to better performance from US shares.
It’s possible that the years and decades ahead could see a reversion to relative returns seen from the 1970s through the early 1990s—before the effects of globalization took hold. The golden age of US investing arguably began after the Japanese stock market bubble burst—since 1990, the US market has generated a compounded annual rate of return (CAGR) of 10.4% compared to just a 4.2% CAGR for global ex-US shares.
A six-percentage-point gap is massive for your long-term portfolio return. A $100,000 initial investment growing at 4.2% annually for 30 years turns into $344,000, only marginally outpacing inflation. A 10.4% CAGR over three decades yields a whopping $1.95 million nest egg.
Hindsight is 20/20, though, and the past is not prologue in markets. While the US has beaten international equities in 22 of the past 36 years, there could be a near-term catch-up trade among foreign equities, particularly those in the Euro Area.
US and Ex-US Annual Returns Since 1986
Source: Portfolio Visualizer
The Short-Term Nature of European Outperformance
Zoom in on Europe; you will find major recent alpha across the pond. Year-to-date through March 14, VGK was up 14.2% compared to the SPXTR’s 3.9% decline. It's VGK’s best start to a year since its inception over two decades ago. Other European index funds’ performance reveals that the region is off to its hottest return through mid-March in any year this century.
Driving VGK’s strong absolute and relative performance are myriad factors. Maybe the most important is not fundamental to economics and global macro issues at all. We’re talking about positioning. “US exceptionalism” became a common phrase in the financial media, and investors seemed to throw in the towel on the whole international diversification thing.
Furthermore, the re-election of President Trump only fueled US fervor—the prospect of tariffs, deregulation, and lower US taxes was the dynamic trio of bullish factors that many market participants gravitated towards to reinforce their US-centric portfolios as the only way to go. Hence, behavioral factors, including confirmation bias and herd behavior, were crucial.
US Equity Positioning Soared After the 2024 Election
Source: BofA Global Research
Recent Flows Favor Europe. Largest 5-Week Inflow in a Decade, per EPFR
Source: Macrobond
Along with investors caught offsides with positioning, there was a foul on the currency front. EURUSD neared parity, a psychologically important level. Days before Trump was sworn in for the second time, the euro dipped under $1.02, its weakest mark since late 2022. For US investors, a weakening foreign currency generally leads to soft ex-US returns compared to the domestic market. Conversely, ex-US funds tend to outperform during a weaker dollar environment, but it’s not a sure thing.
So far in 2025, EURUSD has climbed by more than 5%, essentially a five-percentage-point tailwind for holding dollar-denominated European funds. Macro investors must recognize that currency movements are often cyclical and influenced by short-term factors like interest rate differentials and market sentiment rather than sustainable trends. So, don’t fall in love with the rising-euro theme just yet.
EURUSD Holds the Parity Level, Rallies in 1Q25
Source: TradingView
A third factor helping cast Europe in a rosy light is anticipated earnings growth. According to the current consensus numbers, the Euro Area’s bottom-line growth rate is seen rising by 10%, about three percentage points better than the S&P 500’s CY 2025 EPS increase. So, we could see more substantial corporate earnings growth in Europe, but it must be contextualized.
President Trump has pressured European lawmakers to step up their defense-spending game. For decades, particularly during the globalization era, the US footed much of the world’s military bill, as we acted as the international police. That may be changing. Though there are key differences, so far, between Trump 1.0 and 2.0, one thing has not changed: America First. The president wants to see other nations (and their taxpayers) pull their own weight regarding defense investments. One of the results is a fresh set of stimulus measures, particularly from the defense-heavy German economy. Now, 50-plus years ago, Germany beefing up its military prowess may not have been the most exciting international development, but times change, of course.
The US Has Carried the Global Defense Spending Load in Recent Decades
Source: Morningstar
US Exceptionalism Was Built on Massive Government Spending Compared to Europe
Source: BofA Global Research
For the Euro Area as a whole, the Solactive GS EU Defense Index illustrates just how much military spending could increase. The chart below shows the price returns of a basket of prominent industrial names associated with EU defense, and it has soared from under 100 when Trump was re-elected to above 190 as of March 14—a near double in barely more than four months. If price action is any indicator, Europe is about to don their “big-boy pants,” as we dubbed it in a recent Macro Calendar blog.
The Solactive GS EU Defense Index Goes Parabolic in 2025
Source: Solactive
To review, investors were caught off guard by a European market snapback, the euro currency was oversold, and the hefty amount of EU defense spending acts as a stimulus of sorts for the entire continent (which happens to coincide with a period of potential austerity in the US due to DOGE).
A fourth factor is valuation. Even after the early-2025 European heater, the region trades at just 14.0 times forward earnings estimates as of mid-March. The US, on the other hand, sells for a 20.7x forward P/E. Now, since tech and other high-growth sectors command high weights in the US stock market, it makes sense for the S&P 500 to feature a premium earnings multiple, but the gap is unusually high.
Pair the P/E view with the aforementioned profit growth rate estimates this year, and the PEG ratios clearly favored Europe coming into 2025. Thus, that gap is being filled somewhat, and it’s quite possible the trend will continue in the quarters ahead. What’s more, Europe’s equity risk premium—the earnings yield minus the real risk-free Treasury rate—is about a point and a half higher than the US’.
Those seeking diversification may also appreciate that the Euro Area is much less concentrated than the S&P 500.
Europe is Temporarily Cheaper than the US on a Sector-Neutral Basis
Source: Goldman Sachs
VGK Less Top-Heavy than the Mag 7-Heavy SPX
Source: Vanguard Group
There are other x-factors at play, too. Europe’s economic recovery, while tepid after the energy crisis following the Russia-Ukraine conflict, provides a tailwind for the three European bourses (FTSE 100, Xetra DAX, CAC 40), but structural issues such as bureaucratic bloat, demographic challenges, and slower innovation adoption temper Allio’s long-term optimism about the continent. While lower, the US’ 7% EPS growth is built on consistent economic expansion, technological leadership, and a more flexible labor market.
These macro realities are reflected in recent monetary policy signals and actions from the Fed and the European Central Bank (ECB). In March, the Federal Open Market Committee (FOMC) held its interest rate unchanged, reflecting a cautious approach with high tariff uncertainty and inflation still hovering materially above its 2% target. Conversely, the ECB met two weeks before the FOMC and cut its main interest rate by a quarter point. It remains to be seen how recent stimulus news in the Euro Area will impact inflation and what the Fed’s response might be. Structurally higher rates in Europe may help support the euro. Currency parity chatter could wane in the years ahead, particularly if Treasury Secretary Bessent and President Trump have their way with lower intermediate-term yields.
Why the US Remains More Conducive to Capitalism
If the P/E gap goes from, call it, seven to just three, that would imply the potential for 20% of additional European alpha this year. Toss in 1.6 percentage points of additional dividend return and three points of extra earnings, and it could be a great 2025 for VGK. It's a gaudy sum, for sure, but it does not change the long-term reality that for investors seeking exposure to the most innovation-driven, capitalistic market environment, the U.S. remains a strong candidate.
Despite all the red tape (that DOGE strives to cut), our country fosters an environment where businesses, big and small, can thrive—several factors back that up. First, the US boasts a dynamic entrepreneurial ecosystem—look no further than what comes out of Silicon Valley. Our penchant for innovation drives productivity and attracts global capital. The U.S. work culture tends to emphasize productivity and innovation, contributing to a dynamic business environment.
Second, the US benefits from lighter business regulations than Europe, which is a horror if you want to build a venture from scratch. The European Union’s patchwork of national laws is highly complicated, crowding out new forms of capitalism. This fragmentation stifles growth and deters investment in Europe, as companies face higher compliance costs and slower decision-making.
Third, the US labor market is known for its flexibility, allowing firms to adapt quickly to economic shifts, and we have seen that play out in recent cycles. “US exceptionalism” took off in the wake of COVID as American workers found new ways to get “stuff” done (for lack of a better word). Europe, by contrast, often grapples with rigid labor laws and higher social welfare costs, which can weigh on corporate profitability.
Fourth, part and parcel of a thriving capitalistic environment is access to capital for growing businesses. Both young and established companies have a clear advantage stateside compared to heavily regulated European funding arenas. Hence, the total dollar value of assets invested in the US equity market far exceeds that in Europe. Moreover, venture capital, growth equity, and private equity risk-taking in the US dwarf funding in Europe. Drilling down further, an appetite for investing in domestic startups leads to growing the American economic pie, reinforcing the US as a powerhouse across all business sizes.
Finally, let’s revisit Europe’s high dividend yield. It looks great on paper, but it proves that US companies are wont to aggressively reinvest profits on expansion projects, such as research and development, significant capital investments, or the hiring of new workers. European conglomerates take a more conservative approach that prioritizes income over growth, complacency over proactiveness. While this appeals to certain investors, it suggests a lack of confidence in high-growth opportunities within Europe.
Applying Ray Dalio’s Principles to the Continental Divide
Investors can look to Dalio for insights on the US-European market dynamic.
Principle 1: Understand the Big Picture Through Economic Cycles
Near-term bullishness toward Europe may be warranted due to where we are in the business and debt cycles. You see, the Euro Area went through an austerity process during and after the Greek debt crisis in 2011. The region may now be in the earlier phases of the business cycle in which investments are made and debt is increased. The US, by contrast, could be in a less favorable cycle stage as we look to tackle our incredible federal debt burden. The P/E and EPS growth views further support the premise that Europe is in the earlier stages of recovery.
Dalio’s framework suggests that while Europe may offer tactical opportunities due to its cyclical position, domestic structural advantages make the US a better long-term bet. As always, closely monitoring macro determinants is key to pouncing on important changes between asset classes.
Principle 2: Diversify to Manage Risk
Dalio’s mantra of diversification aligns with the case for allocating both at home and abroad. He describes the “Holy Grail of investing”—creating a portfolio of 15-20 uncorrelated return streams to reduce risk without sacrificing returns. As globalization wanes, the potential for declining correlations between US and European markets fits this principle perfectly.
For example, investors can reduce portfolio volatility by holding both domestic growth stocks and European value stocks. Dalio’s all-weather portfolio, a mix of stocks, bonds, and commodities, is another allocation approach. Allio believes in spreading risk across stocks, bonds, interest-earning cash, commodities, real estate, gold, or cryptocurrency to best reap diversification’s benefits, but erring on the US side of the pond still looks favorable.
Principle 3: Don’t Bet on What’s Already Priced In
Dalio warns against chasing trends that are already reflected in asset prices. Europe’s recent alpha, partly driven by the EURUSD rally and cyclical earnings growth, may already be priced into current valuations to an extent.
On the flip side, the US’ higher P/E ratio is a sentiment barometer of sorts, reflecting long-run optimism about the domestic economy. Investors should be cautious about over-allocating to Europe simply because of its recent strength; momentum is real, but performance-chasing too often ends in tears.
Principle 4: Balance Risk Across Environments
All-weather investing involves balancing portfolios across different economic environments (e.g., growth, inflation, stagnation). US and European markets offer complementary exposures: We thrive in high-growth environments.
Europe’s higher dividend yield and lower valuations provide stability during downturns, usually doing better when the value style is in vogue (think: 2000-2009). By carefully blending these exposures, investors can create a more resilient portfolio throughout cycles, as Dalio advocates.
The Bottom Line
European stocks have soared to begin 2025. It has fooled many investors, but we are pleased to see strength from new areas away from the Mag 7. That doesn’t change Allio’s long-standing belief that the US is the cradle of capitalism. Yes, Europe boasts a higher dividend yield, lower P/E multiple, and potentially better earnings growth this year. These are short-term trends, though, and we urge investors to heed Dalio’s principles in times like these.
We aim to pursue growth opportunities across diverse macroeconomic conditions with Allio’s Dynamic Asset Allocation strategies. Our macro-investing philosophy focuses on the powerful forces that shape markets: economics, policy, and politics. From asset classes to geographies and industries, we offer investors personalized AI-powered solutions to help them think bigger and make informed decisions when building their portfolios.
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Disclosures
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, Allio Capital does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Performance could be volatile; an investment in a fund or an account may lose money.
There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.
This advertisement is provided by Allio Capital for informational purposes only and should not be considered investment advice, a recommendation, or a solicitation to buy or sell any securities. Investment decisions should be based on your specific financial situation and objectives, considering the risks and uncertainties associated with investing.
The views and forecasts expressed are those of Allio Capital and are subject to change without notice. Past performance is not indicative of future results, and investing involves risk, including the possible loss of principal. Market volatility, economic conditions, and changes in government policy may impact the accuracy of these forecasts and the performance of any investment.
Allio Capital utilizes proprietary technologies and methodologies, but no investment strategy can guarantee returns or eliminate risk. Investors should carefully consider their investment goals, risk tolerance, and financial circumstances before investing.
For more detailed information about our strategies and associated risks, please refer to the full disclosures available on our website or contact an Allio Capital advisor.
For informational purposes only; not personalized investment advice. All investments involve risk of loss. Past performance of any index or strategy is not indicative of future results. Any projections or forward-looking statements are hypothetical and not guaranteed. Allio is an SEC-registered investment adviser – see our Form ADV for details. No content should be construed as a recommendation to buy or sell any security.
Disclosures
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, Allio Capital does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Performance could be volatile; an investment in a fund or an account may lose money.
There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.
This advertisement is provided by Allio Capital for informational purposes only and should not be considered investment advice, a recommendation, or a solicitation to buy or sell any securities. Investment decisions should be based on your specific financial situation and objectives, considering the risks and uncertainties associated with investing.
The views and forecasts expressed are those of Allio Capital and are subject to change without notice. Past performance is not indicative of future results, and investing involves risk, including the possible loss of principal. Market volatility, economic conditions, and changes in government policy may impact the accuracy of these forecasts and the performance of any investment.
Allio Capital utilizes proprietary technologies and methodologies, but no investment strategy can guarantee returns or eliminate risk. Investors should carefully consider their investment goals, risk tolerance, and financial circumstances before investing.
For more detailed information about our strategies and associated risks, please refer to the full disclosures available on our website or contact an Allio Capital advisor.
For informational purposes only; not personalized investment advice. All investments involve risk of loss. Past performance of any index or strategy is not indicative of future results. Any projections or forward-looking statements are hypothetical and not guaranteed. Allio is an SEC-registered investment adviser – see our Form ADV for details. No content should be construed as a recommendation to buy or sell any security.
Disclosures
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, Allio Capital does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Performance could be volatile; an investment in a fund or an account may lose money.
There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.
This advertisement is provided by Allio Capital for informational purposes only and should not be considered investment advice, a recommendation, or a solicitation to buy or sell any securities. Investment decisions should be based on your specific financial situation and objectives, considering the risks and uncertainties associated with investing.
The views and forecasts expressed are those of Allio Capital and are subject to change without notice. Past performance is not indicative of future results, and investing involves risk, including the possible loss of principal. Market volatility, economic conditions, and changes in government policy may impact the accuracy of these forecasts and the performance of any investment.
Allio Capital utilizes proprietary technologies and methodologies, but no investment strategy can guarantee returns or eliminate risk. Investors should carefully consider their investment goals, risk tolerance, and financial circumstances before investing.
For more detailed information about our strategies and associated risks, please refer to the full disclosures available on our website or contact an Allio Capital advisor.
For informational purposes only; not personalized investment advice. All investments involve risk of loss. Past performance of any index or strategy is not indicative of future results. Any projections or forward-looking statements are hypothetical and not guaranteed. Allio is an SEC-registered investment adviser – see our Form ADV for details. No content should be construed as a recommendation to buy or sell any security.
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What We Do
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Who We Are
Legal
Allio Advisors LLC ("Allio") is an SEC registered investment advisor. By using this website, you accept our Terms of Service and our Privacy Policy. Allio's investment advisory services are available only to residents of the United States. Nothing on this website should be considered an offer, recommendation, solicitation of an offer, or advice to buy or sell any security. The information provided herein is for informational and general educational purposes only and is not investment or financial advice. Additionally, Allio does not provide tax advice and investors are encouraged to consult with their tax advisor. By law, we must provide investment advice that is in the best interest of our client. Please refer to Allio's ADV Part 2A Brochure for important additional information. Please see our Customer Relationship Summary.
Online trading has inherent risk due to system response, execution price, speed, liquidity, market data and access times that may vary due to market conditions, system performance, market volatility, size and type of order and other factors. An investor should understand these and additional risks before trading. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Past performance is no guarantee of future results.
Brokerage services will be provided to Allio clients through Allio Markets LLC, ("Allio Markets") SEC-registered broker-dealer and member FINRA/SIPC . Securities in your account protected up to $500,000. For details, please see www.sipc.org. Allio Advisors LLC and Allio Markets LLC are separate but affiliated companies. Allio Capital does not offer services to Florida.
Securities products are: Not FDIC insured · Not bank guaranteed · May lose value
Any investment , trade-related or brokerage questions shall be communicated to support@alliocapital.com
Please read Important Legal Disclosures
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What We Do
What We Say
Who We Are
Legal
Allio Advisors LLC ("Allio") is an SEC registered investment advisor. By using this website, you accept our Terms of Service and our Privacy Policy. Allio's investment advisory services are available only to residents of the United States. Nothing on this website should be considered an offer, recommendation, solicitation of an offer, or advice to buy or sell any security. The information provided herein is for informational and general educational purposes only and is not investment or financial advice. Additionally, Allio does not provide tax advice and investors are encouraged to consult with their tax advisor. By law, we must provide investment advice that is in the best interest of our client. Please refer to Allio's ADV Part 2A Brochure for important additional information. Please see our Customer Relationship Summary.
Online trading has inherent risk due to system response, execution price, speed, liquidity, market data and access times that may vary due to market conditions, system performance, market volatility, size and type of order and other factors. An investor should understand these and additional risks before trading. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Past performance is no guarantee of future results.
Brokerage services will be provided to Allio clients through Allio Markets LLC, ("Allio Markets") SEC-registered broker-dealer and member FINRA/SIPC . Securities in your account protected up to $500,000. For details, please see www.sipc.org. Allio Advisors LLC and Allio Markets LLC are separate but affiliated companies. Allio Capital does not offer services to Florida.
Securities products are: Not FDIC insured · Not bank guaranteed · May lose value
Any investment , trade-related or brokerage questions shall be communicated to support@alliocapital.com
Please read Important Legal Disclosures
v1 01.20.2025