The US Stock Market Looks Pretty Average If You Compare it to the Rest of the World


The Wall Street Journal reports that although US stocks are doing well, world stocks are doing even better:

Several major stock indexes that exclude U.S. stocks are on pace to best the S&P 500 for the first time since 2012, according to Morningstar. It’s a trend that’s playing out in both developed and emerging markets….The Vanguard Total World Stock Index Fund, which owns global stocks, including the U.S., is up 7.5% and is so far on pace to top the S&P 500 by the widest margin since 2009.

Sure enough, the S&P 500 (in blue) is doing worse than three different Vanguard ETFs that track non-US stocks:

A word of warning, though: I had to cherry pick the starting date pretty carefully to get this view. Starting dates that differ by even a few days produce a much tighter cluster. And most of the S&P’s performance woes are due solely to a lackluster March.

Still, the Vanguard All-World ETF (in green) has been consistently better all along by a fair margin over the S&P 500. Generally speaking, it’s fair to say there’s nothing special about the American stock market surge over the past few months. It’s just riding along with the rest of the world.