Where you’ll find the cheapest and most expensive stock markets in the world

How do you know if stock markets look cheap or expensive? We have created a Valuation Tracker, which includes an interactive map and a table, that show you how major global equity indices are valued on various financial metrics each quarter.

By clicking on our map, you’ll discover the price-to-earnings (P/E) ratios of stock markets around the world. The higher the ratio, the more expensive a stock or market is relative to its earnings.

But of course, the P/E ratio isn’t the only metric that defines whether a stock’s valuation makes it an attractive investment. There are other metrics, such as price-to-book (P/B) ratios, free cash flow yield or dividend yield that an investor can take into account.

So, we have also built a table that shows you how these metrics are valued on equity indices worldwide. Each quarter we will send subscribers new data.

To put everything in context and give you an understanding of how our managers use valuations in their investment strategies, our experts provide commentary about where the global investment opportunities and risks for equities are over the long-term. 

Find out how the major equity indices around the world are valued on other financial metrics with our table. 

Hear from our experts

What are the investment opportunities and risks for equities in Europe?

Interest in Europe appears to be turning more positive as investors question the end of US exceptionalism and various significant, pro-active European fiscal developments drive a pick-up in regional growth expectations. 

While valuations across European markets have broadly responded positively to this shift, there are still some extremely interesting valuations both at the sector and individual company level, which a fundamentals-based stock picking approach can exploit. 

We look for opportunities where positive change has been mispriced by the market and, while we manage balanced portfolios across all sectors, we see excellent long-term return potential in areas including basic materials, energy, utilities, and banks. 

Key risks in the near term include US tariffs and China, but these are largely already reflected in valuations, in our view. 

What are the investment opportunities and risks for equities in Asia?

Asian markets remain well below their long-term averages and trade at a steep discount to developed markets, especially the US.

Asia offers strong investment opportunities, including leading tech and manufacturing firms in North Asia, fast-growing consumer and e-commerce sectors in India and Southeast Asia, and exposure to rising incomes through robust financial institutions. The region also plays a key role in global supply chains for AI, renewables, batteries, and commodities.

While geopolitical risks, such as US trade tariff policies, remain a concern, many Asian companies have strong balance sheets and competitive advantages that may support resilience. If global trade shifts away from China, other Asian economies could benefit, boosting intra-Asian trade.

What are the investment opportunities and risks for equities globally?

The key advantage of investing globally is the breadth of the opportunity set. For active managers, there is an enviable choice of stocks across sectors and geographies. At any given time, there will always be areas of the market that are out of favour.

We can exploit this by finding those companies where sentiment is against them in the short term, perhaps for geopolitical reasons, but the long-term fundamentals of the business remain intact.

Investing globally can also help manage risk. Some regional markets are more exposed to specific sectors or industries. By investing globally, we can ensure that we can manage style and factor risks to ensure a diversified portfolio.

Even within a global portfolio, you can still be exposed to themes or market fads. By focusing on valuation and employing a range of risk management tools, such as correlation analysis, we can offset these risks.

What are the investment opportunities and risks for equities in the UK?

UK equities offer exposure to many high-quality, cash-generative companies trading at valuations below global peers, even after taking account of differences in return-on-capital. They offer compelling income streams and capital growth that can provide a valuable defence against inflation.

Sector exposures are very different from other global equity markets, bringing additional diversification benefits.

Stability of government and ongoing improvement in relations with European capitals after years of distance over issues relating to the EU are helpful to sentiment.

Key risks include the growth of protectionism and other geopolitical events that have the potential to spark a prolonged global recession.

What are the investment opportunities and risks for equities in the US?

We see significant upside potential in regional banks and healthcare, with attractive long-term prospects in HMOs, select consumer staples, and a few high-quality media names.

We continue to favor communication services and technology stocks, which we believe will gain market share in advertising and benefit from advancements in artificial intelligence initiatives.

We believe market volatility may continue into 2025, given economic uncertainty related to the new White House Administration’s fiscal policies (effect of tariffs), along with sanctions (Iran, Russia, and China) and ongoing conflict in the Middle East and the Russia/Ukraine war.