Non-US Growth Overweight as the AI Unwind Hedge
Stay in equities by owning non-US growth where the fastest earners sit and AI concentration is lower.
Global growth is converging and most companies with 25%+ long-term earnings growth sit outside the US Magnificent Seven. US Shiller CAPE above 41 is historically extreme while non-US markets offer both cheaper valuations and genuine growth. Prefer lower AI-representation regions over Korea and Taiwan, which carry more concentration risk than much of Southeast Asia, Japan and Latin America.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| VXUS | Long | The majority of the world's fastest projected earnings growers sit outside the US index while domestic valuations and AI correlations leave few uncorrelated domestic sleeves; a broad non-US equity overweight is the way to stay invested without owning the US AI unwind. | |
| EEM | Long | Growth convergence is global and under-owned; markets with lower AI index weight offer exposure to high-earnings-growth companies without the same concentration and refinancing risk as US mega-cap AI. |
Capital misallocation into data centres starves housing and favors providers of scarce real-economy capital.
Bubbles misallocate capital and leave starved sectors with decade-long outperformance once capital returns. Data-centre construction crowds out residential supply while housing starts struggle under high capital costs, echoing the late-1990s starvation of energy that later outperformed for years.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| ITB | Long | Residential construction is starved of capital while data centres absorb the buildout, so providers of scarce housing-related capital stand to benefit when capital allocation normalizes after the AI misallocation phase. |
Themes
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