Country Ranking Model - February 2024
Source: MSCI
February Country Rankings
Poland (#1):
Poland remains in first place overall, with excellent fundamentals (ranked #1), valuations (#1) and momentum (#3). Poland has tripled the value of its economy in the last 30 years with some of the highest economic growth rates in the world. The country capitalized on its Communist legacy of industrialization and has attracted foreign investments from the West. This, in turn, stimulated domestic production, successfully inserting the country’s economy into global supply chains. Orlen SA serves as a good example of Poland’s integration into the global economy. The oil refiner was born out of the privatization and merger of two failing state-run petrochemical firms. Today, the company supplies energy to over 100 million Europeans and their products are sold across six continents. Orlen holds a 13.4% weighting in the MSCI Poland index.
Italy (#2):
Italy ranks well across all four factors, but the country’s valuations in particular stand out (ranked 3rd overall). With an earnings yield of 10.4%, price-to-cash earnings of only 5.9, and forward P/E of 9.0, Italian equities are a bargain. With global interest rates higher than they have been in decades, we believe the value factor is primed for outperformance.
Germany (#3):
Germany’s economy contracted -0.3% YoY in 2023 and just barely avoided a technical recession. However, the economy appears to have troughed, and corporate fundamentals are rebounding. Germany is ranked 8th from a fundamental factor perspective. Meanwhile from a risk perspective, Germany is ranked 3rd. The premiums on German credit default swaps are among the lowest in our universe.
Country Performance:
Data as of 1.31.2024
Source: MSCI
Country Ranking Model
As of 1.31.2024
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