This research examines the critical quantitative investment problem of systematic tactical allocation to international equity mandates—specifically Emerging Markets (EM) and Europe, Australasia, and the Far East (EAFE)—amidst conjectured macroeconomic regime transitions. The investigation is precipitated by observable deteriorations in USD hegemony, elevated geopolitical risk premiums, and protracted macroeconomic uncertainty. These factors collectively challenge the post-Global Financial Crisis paradigm of consistent US equity outperformance, suggesting a potential inflection point in relative returns and currency-adjusted Sharpe ratios.

The central research question is whether a statistically robust, signals-based framework can be engineered to systematically time exposure to EAFE equities, thereby capitalizing on these postulated regime shifts. We move beyond traditional, static mean-variance optimization by developing a dynamic model that integrates momentum variables to generate actionable, out-of-sample allocation signals.