T. Rowe Price's Bullish Stance on Non-US Markets: Strategic Analysis

On February 15, 2026, Sebastien Page, Chief Investment Officer of T. Rowe Price, appeared on CNBC to discuss the firm’s overweight position on non-US markets, articulating a compelling investment thesis that challenges the prevailing US market dominance narrative [1]. Page emphasized that “there’s lots of places in the world to invest outside of the US,” highlighting specific sector preferences for European banks and technology while expressing confidence in the valuation opportunities present in global small and mid-cap stocks [1].

This strategic positioning arrives at a critical juncture in global market dynamics. T. Rowe Price manages $1.80 trillion in assets under management as of February 2026 [3], making their allocation decisions particularly significant for institutional and retail investors worldwide. The firm’s December 2025 Global Asset Allocation Viewpoints document indicated continued incremental additions to small-caps with positive tailwinds from lower rates, fiscal policy, deregulation, and increased M&A activity [2].

The core investment thesis articulated by T. Rowe Price reflects a growing consensus among certain asset managers that international markets—particularly small and mid-cap segments—offer compelling valuation discounts compared to US equities. According to the firm’s internal analysis, small-cap earnings and valuations are supported by multiple tailwinds including additional Federal Reserve rate cuts, deregulation, fiscal stimulus, stronger M&A activity, and potential for overlooked winners tied to AI infrastructure build-out [2].

This positioning contrasts sharply with the US market, where valuations have reached elevated levels following years of concentrated gains in mega-cap technology companies. SEB’s 2026 Investment Outlook supports this view, noting that European and emerging-market equities are preferred over US stocks due to “more challenging” valuations and currency uncertainty in the American market [4]. The Swedish bank specifically highlights small-cap companies in Sweden and tech-heavy firms in emerging markets as particularly attractive, driven by improving economic conditions and structural investment trends [4].

The T. Rowe Price stance represents a notable contrarian view in an environment where US equities have dominated for most of the past decade and a half. Since 2009, US stocks have outperformed the rest of the global stock markets in 12 out of 16 years, as measured by the Morningstar US Markets Index versus the Morningstar Global Markets ex-US Index [5]. The recent 2025 outperformance of international markets by nearly 15 percentage points was characterized by Fidelity’s Dean Chisholm as “anomalous” [5], suggesting that the historical pattern of US dominance may be resuming.

However, T. Rowe Price is not alone in seeing value outside the US. Thornburg’s 2026 Global Equity Outlook describes international equities as “the asymmetric opportunity,” noting a divergence in the breadth of market returns worldwide that suggests more opportunities to find relative value outside the US [6]. The investment firm emphasizes that while US AI-related growth opportunities remain largely concentrated in American markets, international companies are showing renewed earnings growth momentum that could allow international equity returns to “compete well with US corporates” [6].

The divergence between T. Rowe Price and Fidelity represents a significant philosophical split in the asset management industry. While T. Rowe Price sees value in international small and mid-caps, Fidelity’s Dean Chisholm argues that median earnings growth is finally positive in the US—the first time in nearly three years—and cites three key tailwinds: corporate tax cuts resulting in effective rates near 7%, lower interest rates supporting borrowing costs, and falling oil prices reducing input costs [5].

Chisholm specifically challenges the value investment approach in international markets, stating that “buying international equities because they are cheap often fails” and that historical data shows international markets in bottom-quartile valuations relative to the US have actually underperformed [5]. This counterargument represents a direct challenge to T. Rowe Price’s thesis and highlights the ongoing debate about the efficacy of valuation-based international allocation strategies.

Within the non-US universe, T. Rowe Price has identified specific sector preferences that warrant attention. European banks represent a particular focus, likely reflecting expectations for improved net interest margins as central banks maintain accommodative policies while economic growth stabilizes [1]. Technology sector exposure outside the US also features prominently in the firm’s strategy, potentially capturing undervalued European and emerging market tech companies that have lagged their US counterparts [1].

SEB reinforces this thematic view, highlighting defense and infrastructure spending in Europe as key growth drivers, along with rapid AI technology adoption across emerging markets [4]. The structural investment trends and lower inflation environment in Europe provide room for accommodative monetary policy, supporting corporate earnings growth [4].

T. Rowe Price reported net outflows of $5.3 billion in February 2026, bringing total assets under management to $1.80 trillion [3]. The company’s stock has lagged the Dow over the past year, with analysts expressing bearish prospects [7]. This creates an interesting dynamic where the firm’s strategic positioning in international markets occurs alongside pressure on its domestic business—a factor that may be influencing the firm’s search for growth opportunities outside saturated US equity markets.

1. Valuation Arbitrage
   : International small and mid-caps trade at significant discounts to US counterparts, presenting potential upside if earnings growth normalizes outside America [2][4].

2. Monetary Policy Divergence
   : The Federal Reserve’s easing cycle compared to other central banks could support international growth while potentially weakening the dollar [4][5].

3. Sector Tailwinds
   : European banks and technology sectors represent specific opportunities within the non-US universe with improving fundamental dynamics [1].

4. M&A Activity
   : Increased merger and acquisition activity in the small-cap space could drive valuations higher and create exit opportunities [2].

5. AI Infrastructure Build-Out
   : International companies tied to AI infrastructure may be overlooked winners that could benefit from the global expansion of artificial intelligence capabilities [2].

1. US Earnings Resilience
   : The turning point in US median earnings growth—first positive in nearly three years—represents a meaningful counterargument to international positioning [5].

2. Historical Pattern
   : US stocks have outperformed in 12 of 16 years since 2009, suggesting the path of least resistance may remain American equity leadership [5].

3. Currency Volatility
   : Dollar weakness could enhance international returns for US-based investors, while dollar strength could amplify losses [4][6].

4. Valuation Trap
   : Fidelity’s warning that “buying international equities because they are cheap often fails” deserves serious consideration given historical data [5].

5. Concentrated US Growth
   : AI-related growth opportunities remain largely concentrated in US markets, making complete avoidance of US equities potentially costly in terms of missed opportunities [6].

The analysis presents a nuanced view of the global equity allocation debate as articulated by T. Rowe Price’s Chief Investment Officer. The firm’s overweight position on non-US markets, particularly global small and mid-caps, is grounded in valuation discounts, multiple tailwinds from monetary policy easing, and sector-specific opportunities in European banks and technology [1][2].

However, this thesis exists within a context of significant counterargument from major asset managers like Fidelity, who maintain that US earnings momentum is fundamentally stronger and that valuation-based international investing has historically underperformed [5]. The debate reflects broader uncertainty about the sustainability of US market leadership versus the potential for international re-rating.

For investors evaluating this positioning, several critical factors merit consideration: the magnitude of valuation gaps between US and international markets, the path of Federal Reserve policy relative to other central banks, currency dynamics, and the ability of international companies to deliver earnings growth that justifies current valuation discounts. The $1.80 trillion AUM manager’s stance represents a significant data point in this ongoing debate, though the ultimate outcome will depend on macroeconomic conditions and corporate earnings trajectories that remain inherently uncertain.