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BLOGThe Bird's Eye View

Timely Perspectives, Unconventional Thinking 

We’re excited to share timely market insights, thoughtful perspectives and expert commentary as part of our commitment to providing modern investment solutions to modern challenges.

Blog hero image

BLOGThe Bird's Eye View

Timely Perspectives, Unconventional Thinking 

We’re excited to share timely market insights, thoughtful perspectives and expert commentary as part of our commitment to providing modern investment solutions to modern challenges.

Equities

The “Korea Discount” Gets a Value-Up Turnaround

While the year-to-date outperformance of non-US equities relative to US names may be attributable to a natural ebb and flow of markets around the long-term mean, the rebound in certain markets may also be a function of secular forces that have awakened animal spirits. One such instance is corporate governance and tax reform in Korea.

In 2024, Korea’s Financial Services Commissions introduced the Corporate Value-Up Program to combat the persistent “Korea discount” in equity valuations as a result of foreign investors’ general reluctance to invest in Korean-domiciled businesses. These reforms are focused on the expansion of fiduciary standards on corporate boards to spur changes at chaebols, the large, family-controlled conglomerates that dominate the Korean economy. While this initiative is in its early stages, we believe that it has the potential to drive a sustained interest and durable re-rating of Korean equities if it becomes a catalyst for meaningful improvements in corporate governance.

 

We believe reforms have the potential to drive a sustained interest and durable re-rating of Korean equities.

 

Fueled by a variety of other factors like growing investments in artificial intelligence and the recently announced trade deal between the US and Korea, the MSCI Korea Index has been a standout performer with an 84% gain in year-to-date 2025.1 While the “Korean discount” is still below its long-term historical average, it has begun to narrow this year. We remain cognizant of risks and challenges, and, as a result, we believe that selectivity in this market is paramount. With a track record of three decades of investing in Korea, we have observed that the country’s corporate focus on innovation in high-end precision manufacturing has contributed to a high density of world-class enterprises, including high-quality global companies with strong management teams and a qualified manufacturing base.2

Chart for Price Ratio of MSCI Korea Index to MSCI World Index

1. Source: FactSet; data as of October 31, 2025.

2. Source: FactSet; data as of October 31, 2025

The information contained in this material is provided by First Eagle Investment Management, LLC (“FEIM”) and its global subsidiaries (collectively, “First Eagle”). FEIM is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training.

This material is for informational purposes only and reflect prevailing conditions and the judgment of the author(s) as of the date of publication, all of which are subject to change. This material should not be relied upon as investment advice; it does not constitute a recommendation to buy or sell a security or other investment; and it is not intended to predict or depict the performance of any investment. This material is not being provided in a fiduciary capacity and is not intended to recommend any investment policy or investment strategy or consider the specific objectives or circumstances of any investor. We consider the information in this material to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of appropriateness for investment.

Prospective investors should inform themselves and consult with an investment, tax or legal professional as to any applicable legal requirements, taxation and exchange control regulations in the countries of their citizenship, residence or domicile that may be relevant prior to investing.

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

All investments involve the risk of loss of principal.

Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur.

Indexes are unmanaged and do not incur management fees or other operating expenses. One cannot invest directly in an index.

A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.

There are risks associated with investing in foreign investments (including depositary receipts). Foreign investments, which can be denominated in foreign currencies, are susceptible to less politically, economically and socially stable environments; fluctuations in the value of foreign currency and exchange rates; and adverse changes to government regulations.

MSCI Korea Index (Net) measures the performance of the large and midcap segments of South Korean equities. A net-return index tracks price changes and reinvestment of distribution income net of withholding taxes.

MSCI World Index (Net) measures the performance of large and midcap equities across developed markets countries. A net-return index tracks price changes and reinvestment of distribution income net of withholding taxes.

The information presented does not reflect the performance of any fund, strategy or account managed or serviced by First Eagle, and there is no guarantee that investors will experience the type of performance reflected. There is no guarantee that any market forecast set forth in this video will be realized. There is no guarantee that any historical trend referenced herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. The mention of specific securities is not a recommendation or solicitation to buy, sell or hold any particular security and should not be relied upon as investment advice.

Availability of the products or services described may be restricted by law in certain jurisdictions. This material may not be distributed, published or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.

United Kingdom
First Eagle Investment Management Ltd is authorized and regulated by the Financial Conduct Authority (FRN: 798029).

Middle East
This material is for information purposes only and has not been, and will not be, registered with or reviewed or approved by any regulator located in the Middle East. It does not constitute or form part of any marketing initiative, any offer to issue or sell, or any solicitation of any offer to subscribe to or purchase, any products, strategies or other services, nor shall it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract resulting therefrom. In the event that the recipient of this material wishes to receive further information regarding any products, strategies or other services, it shall specifically request the same in writing from an authorized financial adviser.

Canada 
Pursuant to the international adviser registration exemption in National Instrument 31-103, First Eagle Investment Management, LLC. is informing you that: (i) First Eagle Investment Management, LLC. is not registered in Canada and is advising you in reliance upon an exemption from the adviser registration under National Instrument 31-103;  (ii) First Eagle Investment Management, LLC’s jurisdiction of residence is New York, USA; (iii) there may be difficulty enforcing legal rights against First Eagle Investment Management, LLC. because it is a resident outside of Canada and all or substantially all of its assets may be situated outside of Canada.

FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy or product.

First Eagle Investments is the brand name for First Eagle Investment Management, LLC and its subsidiary investment advisers.

©2026 First Eagle Investments. All rights reserved.

    Equities

    Valuation Gaps Widen: Case for Active Management

    One of the more prominent themes in today’s equity markets is the unusually wide valuation gap. The top 20% most expensive companies in the S&P 500 Index trade at a price-to-earnings ratio (P/E) of just over 28x, while the bottom quintile trades near 12x—marking a wider valuation gap than the historical norm. As for international equities, the pattern is similar, with the highest valued quintile of the MSCI EAFE Index trading just over 24x versus the cheapest trading near 11x.1

    The overall valuation backdrop in the US remains stretched relative to its long-term average. As of late October, the S&P 500’s forward P/E stood at 23x, compared to its 20-year average of roughly 16x and 30-year average of 17x.2 While these multiples have eased somewhat earlier in the year, they remain well above their historic norms. This could be a reflection of the heavy influence of mega-cap technology companies, which continue to drive much of the index’s performance and contribute to the perception of US stocks as being overly expensive. That being said, international markets appear much closer to fair value and can benefit from supportive tailwinds, such as moderating inflation trends and a weaker U.S. dollar shown earlier in the year.

    For investors seeking diversification, the wide gap between expensive and relatively cheap names supports the case for selectivity—and for global exposure in regions where valuation spreads may offer greater upside potential. Active managers with a focus on quality can be well positioned to navigate this uneven landscape and possibly capitalize on the global market’s persistent inefficiencies.

    Valuation Dispersion Remains Wide, Suggesting a Benefit to Selectivity
    Comparison of S&P 500 Index (top) and MSCI EAFE Index Valuation Dispersion (bottom) 80th Percentile Versus 20th Percentile P/Es
    October 2004 through October 2025  

     

     

     Source: FactSet, as of October 31, 2025. 

    1. Source: FactSet, data as of October 30, 2025. 

    2. Source: Bloomberg; data as of October 31, 2025.

    The information contained in this material is provided by First Eagle Investment Management, LLC (“FEIM”) and its global subsidiaries (collectively, “First Eagle”). FEIM is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training.

    This material is for informational purposes only and reflect prevailing conditions and the judgment of the author(s) as of the date of publication, all of which are subject to change. This material should not be relied upon as investment advice; it does not constitute a recommendation to buy or sell a security or other investment; and it is not intended to predict or depict the performance of any investment. This material is not being provided in a fiduciary capacity and is not intended to recommend any investment policy or investment strategy or consider the specific objectives or circumstances of any investor. We consider the information in this material to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of appropriateness for investment.

    Prospective investors should inform themselves and consult with an investment, tax or legal professional as to any applicable legal requirements, taxation and exchange control regulations in the countries of their citizenship, residence or domicile that may be relevant prior to investing.

    THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

    All investments involve the risk of loss of principal.

    Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur.

    Indexes are unmanaged and do not incur management fees or other operating expenses. One cannot invest directly in an index.

    A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.

    There are risks associated with investing in foreign investments (including depositary receipts). Foreign investments, which can be denominated in foreign currencies, are susceptible to less politically, economically and socially stable environments; fluctuations in the value of foreign currency and exchange rates; and adverse changes to government regulations.

    Diversification does not guarantee investment returns and does not eliminate the risk of loss.

    Indices are unmanaged and do not incur management fees or other operating expenses. One cannot invest directly in an index.

    MSCI EAFE Index (Net) measures the performance of large and midcap equities across developed markets countries around the world excluding the US and Canada. A net-return index tracks price changes and reinvestment of distribution income net of withholding taxes.

    S&P 500 Index (Gross/Total) measures the performance of 500 of the top companies in the leading industries of the US economy and is widely recognized as a proxy for the US market as a whole. A total-return index tracks price changes and reinvestment of distribution income.

    Price-to-Earnings Ratio (P/E ratio) compares a company’s stock price to its earnings per share.

    The information presented does not reflect the performance of any fund, strategy or account managed or serviced by First Eagle, and there is no guarantee that investors will experience the type of performance reflected. There is no guarantee that any market forecast set forth in this video will be realized. There is no guarantee that any historical trend referenced herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. The mention of specific securities is not a recommendation or solicitation to buy, sell or hold any particular security and should not be relied upon as investment advice.

    Availability of the products or services described may be restricted by law in certain jurisdictions. This material may not be distributed, published or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.

    United Kingdom
    First Eagle Investment Management Ltd is authorized and regulated by the Financial Conduct Authority (FRN: 798029).

    Middle East
    This material is for information purposes only and has not been, and will not be, registered with or reviewed or approved by any regulator located in the Middle East. It does not constitute or form part of any marketing initiative, any offer to issue or sell, or any solicitation of any offer to subscribe to or purchase, any products, strategies or other services, nor shall it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract resulting therefrom. In the event that the recipient of this material wishes to receive further information regarding any products, strategies or other services, it shall specifically request the same in writing from an authorized financial adviser.

    Canada 
    Pursuant to the international adviser registration exemption in National Instrument 31-103, First Eagle Investment Management, LLC. is informing you that: (i) First Eagle Investment Management, LLC. is not registered in Canada and is advising you in reliance upon an exemption from the adviser registration under National Instrument 31-103;  (ii) First Eagle Investment Management, LLC’s jurisdiction of residence is New York, USA; (iii) there may be difficulty enforcing legal rights against First Eagle Investment Management, LLC. because it is a resident outside of Canada and all or substantially all of its assets may be situated outside of Canada.

    FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy or product.

    First Eagle Investments is the brand name for First Eagle Investment Management, LLC and its subsidiary investment advisers.

    ©2026 First Eagle Investments. All rights reserved.

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