The US stock market has lagged behind global markets in 2025 due to high valuations, offering better investment opportunities elsewhere. Taiwan Semiconductor’s diversified manufacturing base eases concerns over geopolitical risks. South Korea’s stock market, historically undervalued, is undergoing reforms to attract investors.
Global fund managers are finding investment opportunities outside the US, such as European banks, Brazilian beverage companies, and South Korean chip makers. The US market has returned 11.8% in 2025, compared to 25.8% for global markets ex-US. Valuation gaps across different markets present diverse investment options for funds.
Taiwan Semiconductor, a key player in AI chip manufacturing, trades at a lower valuation than Nvidia, despite a 42% rise this year. The company’s investments in diversified manufacturing locations, including the US, mitigate geopolitical risks. Taiwan Semiconductor’s pricing power and future growth potential make it an attractive investment opportunity.
European banks, previously undervalued, have improved capital reserves and regulatory compliance, with higher interest rates boosting profitability. Austrian Erste Group Bank and French food company Danone are highlighted as attractive investments. Danone’s improved performance post-ESG focus shift underscores the benefits of fundamental business strategies.
Brazil’s high interest rates present investment opportunities, with Bank Bradesco up 92% in 2025. The country’s fiscal health improvements and potential rate cuts could drive stock price growth. Bank Bradesco’s attractive valuation, low leverage, and market position make it a promising investment choice.
South Korea’s stock market is undervalued due to structural issues, but reforms aim to improve shareholder value and corporate governance. SK Hynix, a memory chip manufacturer, is an undervalued AI play with a strong market share and growth potential. The company’s focus on high bandwidth memory and enterprise customers sets it apart in the market.
Read more at Morningstar: Where Global Stock Fund Managers Are Finding Opportunities Right Now