Joseph C. Williams, III, CFA®, Executive Vice President, Director of Investment Strategy
As international markets gain appeal amidst a diminishing U.S. dollar, the United States is focused on the information technology (IT) sector
Sector Composition of MSCI Equity Indexes
Daily Data, as of June 6, 2025
Cap weights calculated in USD, using MSCI constituents and Datastream market cap data.
Source: S&P Capital IQ and MSCI Inc. (GICS)
Robust growth in U.S. technology
Over the past 15 years, the U.S. has experienced a dynamic and responsive economy. The robust growth of
technology, with the surge in social media and artificial intelligence (AI), has been the engine of the U.S. economy. The U.S. remains dominant in technology with companies such as Apple, Microsoft, and recently NVIDIA providing tremendous growth.
Europe and Japan stuck in staid sectors
Europe’s economy has been less dynamic as they are heavy in more rigid sectors such as industrials and financials. Europe’s IT sector is 9.1% of their market cap and communication is 4.9%, a total of 14% compared to the U.S. market cap of 41.7% for technology (32.1%) and communications (9.6%).
In comparison, Japan’s technology sectors are focused on less innovative areas and more consumer-product focused industries such consumer electronics, auto manufacturing, and industrial tools and equipment, all of which have experienced margin compression. Japan’s IT sector is 13.1% of their market cap and communication is 8.0%. Combined, Japan and Europe’s IT market caps are only about two-thirds the level of the U.S.’ market caps.
The Chartered Financial Analyst® (CFA®) Charter is a designation granted by CFA Institute to individuals who have satisfied certain requirements, including
completion of the CFA Program and required years of acceptable work experience. Registered marks are the property of CFA Institute.
Past performance is no guarantee of future results, and the opinions and other information in the commentary are as of June 6, 2025. This summary is intended
to provide general information only and is reflective of the opinions of Commerce Trust. This material is not a recommendation of any particular security, is not
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