U.S. stocks too expensive? Morningstar's top exec reveals where he's investing instead

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Kunal Kapoor,Morningstar Inc,S&P 500 Index

'We believe markets outside the U.S. are more attractive than the U.S. largely from a valuation perspective,' Kunal Kapoor, CEO at Morningstar, said.

Attractive returns and a breadth of opportunities are among the reasons the U.S. market historically reigns supreme among investors. However, one market watcher considers U.S. stocks to be expensive and is now seeking opportunities in cheaper markets with what he sees as better risk-adjusted returns. "We believe markets outside the U.S. are more attractive than the U.S.

Specifically, Chinese equities "stand out from a valuation perspective as there's a gap between the fair values of many prominent companies relative to the price of their stocks today," Kapoor explained. Morningstar's optimism on China comes amid a slew of stimulus measures from the government , including interest rate cuts, lower cash reserve requirements at banks, looser property purchase rules and liquidity support for stock markets and, more recently, a debt swap program.

 

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