It’s been a good year for U.S. stocks. With a mere two weeks left in 2017, the S&P 500 is up 19%, the Dow is up 24% and the Nasdaq leads the charge with a 27% return. But the big run-up in U.S. stocks this year is far from unique—a number of world stock markets have performed even better. In some cases, much better.
Among all world stock markets, the average gain this year has been 20.2%, according to Yardeni Research, Inc. From that perspective, U.S. large caps have actually underperformed the global stock market. As usual in times of growth, emerging markets have had the strongest year, posting an average gain of 29.7%. But strong stock performance was far-reaching in 2017, and markets emerging and developed, small and large, prospered.
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Here are four world stock markets that not only posted gains higher than the global average, but also outpaced all three U.S. stock markets.
Four World Stock Markets Beating the U.S.
1. Ukrainian Stock Exchange (+63.1%)
No market in the world has had a better year than the Ukraine. Known as the PFTS Stock Exchange and based in Kiev, Ukrainian stocks have soared this year. Unfortunately, there’s not a single Ukrainian ADR (American Depositary Receipt) that trades on a major U.S. exchange, though there are 10 that trade over the counter—meaning they haven’t been vetted in the same way an ADR on, say, the New York Stock Exchange or the Nasdaq would be.
2. Argentina’s Merval Exchange (+61.4%)
After a down 2016, Argentina’s economy has posted four straight quarters of GDP growth. Though that growth is modest—GDP expanded 0.7% in the third quarter, roughly in line with its 25-year average—it’s been enough to keep pushing Argentina’s stock market into the stratosphere. This will be the Merval’s sixth consecutive year of double-digit returns. And unlike Ukraine, Argentina actually offers a nice menu of ADRs to the U.S. investor: 21 Argentina-based companies currently offer shares on U.S. exchanges, including oil and gas heavyweight Petrobras Argentina (PZE) and e-commerce giant Mercadolibre (MELI).
3. Kazakhstan Stock Exchange (+55.9%)
It has only 130 listings, but Kazakhstan’s KASE market more than doubled the performance in the Nasdaq this year. In fact, Kazakhstan’s rally dates back to the end of 2015, fueled by a rebound in the country’s commodities exporting economy. As you might expect, however, no Kazakh equities trade on U.S. stock exchanges.
4. Hong Kong Hang Sang Index (+32%)
With our constant focus on Chinese stocks, it’s easy to forget about stocks that are specific to Hong Kong. This year at least, that would have been a mistake: the Hong Kong Hang Seng Index has crushed the Shanghai Stock Exchange (+5.5%). Only three Hong Kong stocks trade on U.S. exchanges, and only one of them has performed well this year: gaming company Melco Crown Entertainment (MLCO), which is up 88% this year.
Strong Returns Reflect Turnaround in Global Economy
Those four stock markets are fairly obscure and, with the exception of Argentina, are difficult to take advantage of if you’re a U.S. investor. But they show that nearly a decade removed from the global recession, the world economy is demonstrating some real growth—from South America to Eastern Europe to a former Soviet republic to the Far East. As a result, world stock markets in virtually every corner of the globe are prospering.
So no matter where you on the map, it’s a good time to be an investor!
Let’s hope that continues in 2018.
Investment analyst and Chief Analyst of Cabot Wealth Daily, Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.Sign up now!