Shiller’s PE continues to trouble us.
This measure of the ERP is less attractive looking (e.g. a lower ERP, other models with slightly different inputs suggest the ERP has increased, as equities drop, RFRs increase and earnings remain relatively unchanged).
Overall, we are neutral international equities (with our underweight to equities in total coming from an underweight to Australian shares), and within international, have an underweight to the US via a slight overweight to everywhere else (e.g. UK, Europe, Japan).
That said, US equities are still +40% of the international exposure – but just a bit less based on the above.
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