Transcript:Caroline WoodsU.S. markets have dominated for a decade, but 2025 saw a massive surge in international equities. Today we’re looking at how to play both sides of the pond. Joining me is Maria Rahni director of product management at New York Life Investment Management. Maria, great to have you here.

Maria RahniHi. Thanks for having me.

Caroline WoodsSo we’re spotlighting two ETFs today U.S. growth equities and international equities. It begs the question where should the focus be right now. International valuations still I guess are historically cheap right. But big tech momentum is hard to ignore. Is the U.S. dominance finally starting to fade?

Maria RahniYeah. So from our perspective this environment is really less about the US losing leadership and more about how that leadership has been evolving. Yes. You know, value valuations, particularly in large cap growth stocks are elevated relative to history. The valuation alone rarely tells the whole story. What’s mattered more has been earnings durability. And on that front, U.S. companies have continued to deliver.

Profit margins have remained resilient, supported by AI related capital investment, relatively stable margins and still supportive policy conditions. What has changed is the structure of the market. For several years, returns have been driven by a very narrow group of mega-cap stocks. However, more recently, earnings growth has begun to broaden beyond that cohort, even as markets have become more volatile.

Historically, that kind of transition can be unsettling, but it often reflects a healthier environment than one driven by a single theme. So rather than framing as a question of, you know, whether U.S. dominance is ending, we view it as a period where selectivity matters more and where leadership is becoming less concentrated and more fundamental, is driven.

Caroline WoodsOkay, so if we drill into U.S. growth first, I. It’s heavy on the mag seven names Nvidia, Microsoft, Apple. I see a lot of them in there. So as you’re being more selective, is it still really within the Mag seven then?

Maria RahniYeah. In our view, when it comes to portfolio construction, it’s really important to think about concentration risk when valuations are elevated. The question isn’t simply whether to own growth or whether whether they’re on the mag seven. It’s how you build exposure within the whole growth over time. Obviously, concentration risk has developed as markets narrowed around a single theme.

I and the mag seven stocks. This is why we believe that diversification within growth matters. And that’s a main tenet of the NY Ally Winslow Large Cap Growth ETF. The tickers once those philosophy is built on what they call the no preferred habitat approach. So rather than anchoring the portfolio to one type of growth, the team diversifies across three complementary types of growth consistent growth, dynamic growth, and cyclical growth.

This allows the portfolio to participate in innovation and AI driven opportunities. And of course, still investing in the Max seven, but also seeking to balance across business dynamics and economic sensitivity.

Caroline WoodsLet’s shift to international. International had a standout 2025 year fund. Sky was up. Looks like nearly 30% are up 30% last year. And it’s off to a strong start in 2026. What supports the case for continued outperformance from here, though?

Maria RahniYes. So the role of international equities today is less about chasing that recent performance and more about broadening investors opportunities. Even after last year’s gains, many developed international markets continue to trade at lower valuations than the US. While earnings expectations have begun to stabilize or improve. That’s being supported by easing inflation pressures, fiscal spending, particularly in Europe, and more normalized central bank policy.

And there’s also structural element to this. We are in a period marked by higher geopolitical risk, more fragmented supply chains and less synchronized global growth. And in that kind of regime, portfolios that are over concentrated in a single region, maybe more exposed to more policy or macro shocks. So international equities can play an important role as a diversifier within a portfolio, helping to reduce reliance on one economic outcome or policy path.

The goal isn’t to replace US exposure, of course, but to complement it in a way that can improve overall portfolio balance over time.

Caroline WoodsOkay, so the ETF has global giants like Samsung in there, ASML, AstraZeneca. Is it a growth story then or a pure diversification play.

Maria RahniIt’s more of a diversification play. And it also has to do with currency volatility. So currency is often an underestimated variable when it comes to investing internationally. Over the past year we’ve seen currency movements either enhance or completely offset local equity returns, depending on investors hedging strategy. And that can be frustrating for investors, especially when the underlying equity thesis is sound.

But the outcome is dominated by foreign currency moves. What we’re seeing now is a dollar that’s rangebound but volatile, reflecting competing forces. So relatively strong U.S. growth on one hand and rising concerns around around fiscal sustainability, geopolitics and global capital flows on the other. And that kind of environment, currency can actually add noise rather than insight to an equity allocation.

One way investors can approach us is by isolating that equity exposure. So the Nyr life with the International Currency Neutral ETF, ticker HFC, is designed with that goal in mind as it provides broad exposure to developed international equities while essentially neutralizing the impact of currency fluctuations relative to the US dollar by hedging 50% of that foreign currency exposure.

So from a quarterly sorry.

Caroline WoodsSo I know I just wanted to ask then how should investors think about the US dollar and the fact that it’s been all over the place this past year? How should they be thinking about that when they’re looking at international allocations?

Maria RahniYeah. So from a portfolio construction standpoint standpoint, you know, when you’re thinking about that, the good thing about this ETF is it helps to kind of neutralize that. And lower the volatility within an international allocation. So when you invest in something like like this strategy, it can allow you to access the growth potential of international companies and a more diverse, sector composition compared to the US, without making an implicit bet on the direction of foreign currencies.

And that can be particularly useful when currency volatility is high and unpredictable.

Caroline WoodsOkay. So for someone who wants international exposure in their portfolios, should they be focused on countries specific names, specific sectors, how should they be approaching that.

Maria RahniWell we think going broad makes sense. You know added something like each of side can add diversification. And it’s a broad exposure to a portfolio. Also you know if you look at the concentration in US equities this can provide some diversification from a sector standpoint as well. Because you don’t have that concentration to tack.

Caroline WoodsOkay. Just finally, 2025 of course was a solid year for the U.S the S&P 500 was up what, 18%. But I saw Blackrock stat that the US actually placed 20th in country returns well behind markets like Japan and the UK and even Canada. I know that you said this isn’t about the US leadership fading more just evolving, but do you expect the US to play catch up this year, or is it going to move even further down that list?

Maria RahniI think if you look at fundamentals and kind of earnings that have been coming out fairly, it’s still strong. The US is in a strong position. I think just when you’re looking at overall portfolio composition, you want to make sure that you’re diversifying. Just given all the geopolitical noise that’s going on in the market right now. So including other countries international developed of course, Canada, Japan and others and even emerging markets makes sense.

Just given what’s going on in the market right now.

Caroline WoodsOkay, great. We’ll leave it there. Maria Rahni director of product management at New York Life Investment Management. Thanks so much.

Maria RahniThank you.