With sectors (and Financials in particular) so much in the news, I thought I'd look at the sector breakdown of various global markets.

People talk a lot about the interaction between the political economy of nation states and the performance of their markets. It is certainly true that different countries are often at different points in the economic cycle. That's one of the reasons why diversifying overseas adds low-correlated returns to a portfolio.

But there's another reason for those differences: sectors.  The sector breakdowns between regions and countries differ widely, and examining those breakdowns can help you understand why one market zigs while another market zags.

Of course, the tail wags the dog here: the sector breakdown is reflective of each region's economy, and vice-versa.  But sectors offer one easy way to gain insight into how and why one economy and market performs differently from another.

U.S. vs. The Developed

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Ever wonder why international markets perform differently from the U.S. (and each other)? Just look at the sectors.

People talk a lot about the interaction between the political economy of nation states and the performance of their markets. And it is certainly true that different countries are often at different points in the economic cycle. That's one of the reasons why diversifying overseas adds low-correlated returns to a portfolio.

But there's another reason for those differences: sectors. The sector breakdowns between regions and countries differ widely, and examining those breakdowns can help you understand why one market zigs while another market zags.

Of course, the tail wags the dog here: The sector breakdown is reflective of each region's economy, and vice versa. But sectors offer one easy way to gain insight into how and why one economy and market performs differently from another.

U.S. Vs. The Developed World

If you

...

Ever wonder why international markets perform differently from the U.S. (and each other)? Just look at the sectors.

People talk a lot about the interaction between the political economy of nation states and the performance of their markets. And it is certainly true that different countries are often at different points in the economic cycle. That's one of the reasons why diversifying overseas adds low-correlated returns to a portfolio.

But there's another reason for those differences: sectors. The sector breakdowns between regions and countries differ widely, and examining those breakdowns can help you understand why one market zigs while another market zags.

Of course, the tail wags the dog here: The sector breakdown is reflective of each region's economy, and vice versa. But sectors offer one easy way to gain insight into how and why one economy and market performs differently from another.

U.S. Vs. The Developed World

If you

...