It was well documented that the stocks with heavy international exposure outperformed by quite a wide margin in the first quarter of this year. April was a different story, however. With Europe running into serious trouble early in the month, US companies that generate a large portion of their revenues outside of the country took a hit.
To highlight the underperformance, we broke the S&P 500 into deciles (10 groups of 50 stocks each) based on the percentage of revenues that each stock gets from outside of the US. We then calculated the average change in April of the stocks in each decile. As shown below, the decile of stocks with the largest percentage of international revenues declined an average of 4.2% in April. This was by far the worst performance of any decile. Conversely, the stocks that generate all of their revenues inside the US averaged a flat return (0.00%) during the month.
If Europe continues to wither, stocks with heavy European exposure will continue to have a tough go at it.