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Seminar Key Takeaways: The Great Rotation: Finding Value in Non-US Equities

At a recent seminar, The Great Rotation: Finding Value in Non-US Equities, Krungsri Asset Management Company Limited, together with Goldman Sachs Asset Management and Allianz Global Investors, deep dived into the shifting dynamics in global capital. Krungsri Asset Management observed that investors are broadening their horizons beyond the U.S. stock market and regions outside of the US could be instrumental in driving returns for investors. Krungsri Asset Management believes that European and Asian equities will be the new engines of portfolio growth in 2026.

Deep Dive into Experts Insights

Mr. Kiattisak Preecha-anusorn, Chief Alternative Investment Officer, Krungsri Asset Management
Ms. Alison Lau, CFA, Head of Quantitative Investment Strategies Client Portfolio Management for Asia Pacific, Goldman Sachs Asset Management

Insights from Goldman Sachs Asset Management

While the U.S. market has historically delivered outstanding returns, a recent pullback of the Magnificent 7, the Nasdaq, and the S&P 500 suggests that U.S. dominance is facing a transition. Driven by extreme valuations in tech-heavy indices and a cooling inflationary environment, the market is witnessing a great rotation toward non-U.S. markets, specifically into European equities and global small-caps stocks. Valuations in these segments are still reasonable, and performance has been resilient in spite of recent volatility. The AI-driven industrial revolution may bring about significant opportunities across a diverse range of sectors and geographies.

Despite geopolitical tensions weighing on investors’ sentiment, Goldman Sachs does not expect a recession within the next 12 months and emphasized that, while such conflicts often trigger immediate market volatility, history suggests their impact is typically short-lived. Since 1980, the S&P 500 has experienced 5-10% drawdowns roughly every 13 months. Investors can view these pullbacks as strategic entry points rather than reasons for exit. (Sources: Bloomberg & Goldman Sachs Asset Management as of 31 Dec 2025)
Unlike the pandemic era, which was characterized by high inflation, central banks today have eased off on rate hikes as inflation has stabilized. The macro resilience, recovery in corporate earnings across Europe and Asia, and market’s reasonable valuation, make European equities a potentially attractive investment opportunity.

Insights from Krungsri Asset Management

The 1^stspotlight subsequently turned to Europe, a region heavily weighted toward value sectors like industrials and financials, which are the primary beneficiaries of the current sector’s rotation.
- To capture this opportunity, Mr. Kiattisak highlighted Krungsri Europe Equity Hedged Fund (KF-HEUROPE), which invests in the Morningstar 5-Star rated fund*, Goldman Sachs Europe CORE® Equity Portfolio that employs a sophisticated quantitative investment strategy that identifies mispricing by finding high-quality companies with attractive valuations. By incorporating market sentiment and precise timing into its model, the fund focuses on individual stock selection rather than broad sector bets. This approach aims to generate alpha and outperform its benchmark consistently.

*Source: Morningstar, Goldman Sachs Asset Management as of 31 January 2026. Morningstar ratings are unrelated to the rankings of Association of Investment Management Companies (AIMC).

The 2^nd pillar of this non-U.S. strategy is Asia, discussed through the lens of Krungsri Oriental Flexible Fund (KF-ORTFLEX), which invests in Allianz Oriental Income Fund.
- Asia serves as the backbone of the global AI ecosystem, with companies in Taiwan, Japan, and Korea holding the keys to the next decade of industrial growth. The master fund of KF-ORTFLEX stands out due to its All-Cap Flexible Strategy, as it invests across the Asia-Pacific region with high flexibility. This includes coverage of Japan, Asia, and Australia/New Zealand, which distinguishes it from typical Asian equity funds that often focus solely on Asia while excluding Japan, Australia, and New Zealand.
- The master fund also utilizes a pure bottom-up selection process to invest in companies with high cash flow and sustainable competitive advantages, while maintaining the geographical flexibility to rotate between Japan’s corporate reforms and Emerging Asia’s domestic consumption.

By partnering with world-class managers like Goldman Sachs Asset Management and Allianz Global Investors, Krungsri Asset Management is confident to provide Thai investors with a distinct path to becoming global equity winners by prioritizing valuation and structural growth in Europe and Asia. For Thai investors seeking opportunities in this rotation, Krungsri Asset Management would like to recommend the following investment alternatives:

Investing in the master fund, Goldman Sachs Europe CORE Equity Portfolio, KF-EUROPE/ KF-HEUROPE provides a pure-play on European equities, while KFEURORMF allows investors to apply this global non-US view to their tax-deductible savings.
Another recommended fund is KF-ORTFLEX, which invests in the master fund, Allianz Oriental Income that has demonstrated outstanding long-term performance and can flexibly invest in equities across the Asia-Pacific region, covering Japan, Asia, and Australia/New Zealand. This differs from typical Asian equity funds, which usually focus on Asia excluding Japan, Australia, and New Zealand (Source: Allianz Global Investors Fund as of 31 Jan 2026.)

For more information or to obtain the prospectus, please contact Krungsri Asset Management Company Limited at 0-2657-5757 press 2, or Bank of Ayudhya Public Company Limited/ Krungsri Securities Public Company Limited.

Invest Policies & Disclaimers:

This document is prepared by sources believed to be reliable at the time of publication; however, the Company does not guarantee the accuracy or completeness of such information.
KF-EUROPE/ KF-HEUROPE/ KFEURORMF invests in Goldman Sachs Europe CORE Equity Portfolio, the master fund, at least 80% of NAV in an average of accounting period.
KF-ORTFLEX invests in Allianz Oriental Income Fund, the master fund, at least 80% of NAV in an average of accounting period.
Risk level 6: High risk. | KF-EUROPE/ KF-ORTFLEX may hedge foreign exchange risk at the fund manager’s discretion. Therefore, these funds are exposed to FX risk, which may result in gains or losses from exchange rate movements and returns lower than the initial investment.
Investors should carefully study product features, conditions, returns and risks before making an investment decision. Past performance is not indicative of future results.