Most Companies In Most Countries Are Underperforming

For every country in the MSCI World Index, we measure the percent of stocks that are outperforming the index.  The results give us some indication of the breadth in the equity markets.  When more than 50% of the companies in a country index are rising, this indicates stock pickers are experiencing good odds of picking an outperforming stock.  When less than 50% of the companies in a country index are beating the MSCI World Index, it suggests poor odds for active stock pickers.

Currently there are only three countries where the percent of companies outperforming the MSCI World Index over the last 200 days exceeds 50%–the US, Japan and Hong Kong.  An extreme example of underperformance is Austria, where none of its companies are outperforming the MSCI World Index.  Most difficult for active managers is the fact that many large markets are experiencing terrible breadth.  In France, only 19% of the companies have beaten the MSCI World Index over the last 200 days: in Canada, only 28% have outperformed: in Germany, only 19% have outperformed.

Chart package is attached here: Percent of Companies Outperforming the MSCI World Index by Country.

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