International equities: a compelling diversification opportunity

A shift in global leadership

For much of the past 15 years, US equities have dominated global market returns, steadily reducing the role of international stocks in the cap-weighted MSCI World Index. By the end of 2024, non-US exposure had fallen to record lows as investors tilted heavily toward US companies.

But 2025 has brought signs of change. A new cycle of regional performance leadership is emerging, putting international equities back in focus and reversing the long decline in non-US allocations that began after the 2008 financial crisis.

Weight of non-US equity in the MSCI world

Why consider international equities now?

Diversification benefits

International equities provide exposure to sectors, economies and monetary policies that often differ from North America. This diversification can help smooth portfolio volatility and improve long-term resilience.

Correlation between international and North American equities

Attractive valuations

US equities are currently trading at significant premiums — both relative to international peers and to their own long-term averages. By contrast, international equities remain closer to historical valuation levels, offering investors a potential mean-reversion opportunity as markets normalize.

Current versus historical P/E

Source: Morningstar. As at November 30, 2025.
International equity: MSCI EAFE Index. US equity: S&P 500 Index.

A disciplined, research-driven approach

The Mackenzie GQE International Equity ETF (MIQE) is managed by the Mackenzie Global Quantitative Equity Team (GQE), which applies a proven, research-based process across all its strategies.

MIQE is designed as a core, all-weather holding, combining quantitative computing power with bottom-up stock selection to identify the most attractive opportunities across developed international markets.

Why MIQE?

• Gain access to international equities that diversify beyond North American markets.
• Capitalize on the current valuation spread between US and international equities.
• Benefit from the GQE Team’s strong track record of generating alpha through disciplined, risk-managed investing.

Performance highlights

Since its launch in September 2024, MIQE has delivered strong returns while maintaining a defensive profile, with lower volatility and smaller drawdowns.

Performance comparison: MIQE vs. MSCI EAFE Index

Since inception, MIQE delivered an annualized excess return of 526 bps relative to the benchmark MSCI EAFE Index (CAD), and 1,061 bps relative to the Morningstar International Equity category’s average.

MIQE versus benchmark & peers

_{Source: Morningstar Direct, returns over 1 year are annualized as of February 28, 2026.}

^{*SI: Since inception date: September 10, 2024.}

Quick facts

ETF managed by the Mackenzie Global Quantitative Equity Team (GQE):

• Arup Datta, MBA, CFA – SVP, Portfolio Manager, Head of Team
• Nicholas Tham, CFA – VP, Portfolio Manager
• Denis Suvorov, CFA – VP, Portfolio Manager
• Haijie Chen, PhD, CFA – VP, Portfolio Manager

The bottom line

As global leadership shifts, international equities are once again a powerful tool for investors. With strong diversification benefits, compelling valuations and a disciplined active approach, the Mackenzie GQE International Equity ETF (MIQE) offers a timely and effective way to strengthen global portfolio exposure.

Commissions, management fees, brokerage fees and expenses may all be associated with Exchange Traded Funds.  Please read the prospectus before investing.  Exchange Traded Funds are not guaranteed, their values change frequently and past performance may not be repeated. 

Index performance does not include the impact of fees, commissions, and expenses that would be payable by investors in the investment products that seek to track an index. 

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This article may contain forward-looking information which reflect our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of November 30, 2025. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.