Why Morgan Stanley's Kandhari is overweight India, Mexico, Brazil, Eastern Europe

Watch on YouTube ↗  |  January 07, 2026 at 20:35  |  4:37  |  CNBC
Speakers
Jitania Kandhari — Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management

Summary

Jitania Kandhari of Morgan Stanley argues that the case for international diversification is compelling because the US represents 65% of global indices, the dollar is on a weakening path, and macro fundamentals abroad are improving. She highlights AI supply chain opportunities across the US and China, industrials in North Asia, financials outside the US, and geopolitical hedges in gold, silver, energy, and materials. The discussion centers on broadening allocations away from US concentration.

  • US equity market is 65% of global indices, near 1970s high.
  • Europe and Japan have much smaller shares of global indices than in prior peaks.
  • A weakening dollar and supportive macro policy underpin international equities.
  • AI supply chain opportunities are seen in both US and China ecosystems.
  • North Asian industrials are favored across defense, electrification, and autonomy.
  • Financials outside the US are favored in EM, Europe, and Japan.
  • Geopolitical hedges include gold, silver, energy, mineral assets, and materials.
Ideas
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 1:34
Dollar in weakening run
After a strong 15-year run, the dollar is in a weakening phase due to macro fundamentals, growth and policy, which supports international assets.
USD MED
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 1:43
Rebalance from US to international equities
The US accounts for about 65% of global indices, near its 1970s high, while Europe and Japan have seen their index shares fall sharply. Macro fundamentals, growth policy and a weakening dollar make the case for international markets compelling, so investors should rebalance some US exposure and broaden allocations both within and outside the US.
ACWX HIGH
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 2:55
AI supply chain broad opportunity
AI supply chain opportunities are important in developed markets, with both the US and China ecosystems broad and thriving; investors should pick opportunities across the AI supply chain in the West and East.
SMH MED
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 3:16
Non-US industrials offer major opportunity
Industrials outside the US are a major opportunity, especially in North Asian markets and countries with large industrial sectors, driven by themes such as defense, electrification and autonomy.
Non-US industrials MED
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 3:32
Non-US financials attractive across regions
Financials outside the US are very interesting: EM banks have monetary/fiscal orthodoxy, high real rates and preemptive tightening now shifting to rate cuts, which should drive a new credit cycle and loan growth; European financials benefit from yield-curve steepening and increased M&A/loan growth; Japanese financials benefit from yield-curve steepening.
Non-US financials HIGH
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 3:54
European financials benefit from curve, M&A
Some European financials should benefit from a steeper yield curve driving net interest margins, plus increased M&A activity and loan growth.
European financials MED
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 4:09
Japan financials benefit from steeper curve
Japanese financials should benefit from yield-curve steepening.
DXJ MED
Jitania Kandhari Deputy CIO, Solutions and Multi-Asset Group, Morgan Stanley Investment Management 4:24
Geopolitical hedges: gold, silver, energy, materials
The speaker favors geopolitical hedges, including gold and silver as well as energy and mineral assets/materials spread across the world.
GLD SILVER XLE XME XLB MED
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This CNBC video, published January 07, 2026, features Jitania Kandhari discussing USD, ACWX, SMH, Non-US industrials, Non-US financials, European financials, DXJ, GLD, SILVER, XLE, XME, XLB. 8 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Jitania Kandhari  · Tickers: USD, ACWX, SMH, Non-US industrials, Non-US financials, European financials, DXJ, GLD, SILVER, XLE, XME, XLB