Developed international equities have finally shed their status as a “value trap” and now offer a fundamentally sound alternative to a concentrated U.S. market, riding the wave of the Magnificent 7 tech giants, according to Jurrien Timmer, Director of Global Macro at Fidelity Investments.

Here’s how the Mag 7 tracking MAGS ETF is performing.

Unlocking Shareholder Value

Speaking on a recent episode of the Facts Versus Feelings podcast, Timmer argued that international markets (Europe, Australasia, and the Far East) have found the missing ingredient that previously kept savvy investors away.

For years, low valuations in Europe and Japan were deceptive—cheap for a reason—lacking a fundamental catalyst to drive price appreciation. That dynamic has shifted as foreign companies become “much smarter” about capital allocation.

“The payout ratio for the EAFE index… is now the same as in the US. It’s 75%,” Timmer noted, referring to the combination of dividends and stock buybacks as a share of earnings.

He highlighted that the growth ...