Stock Market Country Selection: July 2026: Favouring EM; Cautious on US and Europe-ex-UK

Research evidence excerpt

Stock Market Country Selection: July 2026: Favouring EM; Cautious on US and Europe-ex-UK

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15 Jul 2026 14:42:44 ET │ 30 pages

Stock Market Country Selection

July 2026: Favouring EM; Cautious on US and Europe-ex-UK

CITI'S TAKE

Europe

Model selection remains skewed toward Emerging Markets, with the

regional framework retaining a cautious stance on the US and Europe ex- David T Chew AC

UK, while maintaining positive signals for China and Latin America. Within +44-20-7986-7698

the country allocation model, China enters the long basket alongside Brazil david.chew@citi.com

and South Korea, increasing overall EM exposure. Austria and Hong Kong

continue to rank among the most attractive markets on a composite basis.

At the other end of the spectrum, India, Malaysia, and the US remain among North America

the least preferred markets, primarily driven by elevated valuations and

softer earnings revision momentum. Richard W Schlatter

+1-212-816-0591

Performance for June — A dynamic geopolitical backdrop and the continued richard.w.schlatter@citi.com

extension of the AI-driven equity rally weighed on model performance last month.

Anju BhandariBoth long and short portfolios underperformed, resulting in a softer overall return

profile for the month. Despite recent headwinds, both the regional and country +1-212-816-3812

selection frameworks continue to maintain resilient long-run performance, anju.bhandari@citi.com

delivering annualised long-short returns of 4.7% and 4.9%, respectively.

Changes for the Long Portfolio —No changes to the long side for the regional model Asiawhile maintaining a favorable bias for China and LatAm. In the country model, China

replaces South Africa on the long side, while maintaining a preference for Austria, Yue Hin Pong