Return expectations from US equities among asset management companies are at a post-financial crisis low. EM equities may look cheap after last week’s correction, but asset managers have their reasons to stay sceptical.
European investors again added to their US equity allocation in July after a 6-month pause. Net inflows amounted to €2.7bn, the largest since February 2014.
China’s shadow over global markets is pushing a US interest rate rise to December, and unless it relinquishes its grip the wait could go on even longer.
Which criteria do fund analysts value most when they conduct an investment fund screening process? Research firm Cerulli asked the question to a sample of fund analysts based in the United States. The answer? They care most about the costs, and much less about track record.
The Danes are once again Europe’s most optimistic investors, with a record 83% of them having a positive macroeconomic outlook. They are in a convincing risk-on mode, with continuously high demand for European equities and relatively big appetite for risky bonds.
Fund selectors in Europe have changed tack. A year ago they were strongly in favour of small caps, but now they believe it’s large caps that have the better return prospects, according to data gathered at EIE events across Europe this year.
Relatively high valuations in a particular stock market are followed by a steady appreciation of the home market’s base currency in the next five years. Therefore it’s very likely that the dollar will resume its upward trajectory versus the euro.
The announcement by the Icelandic government last week that it is planning to lift the capital controls on the island can already now be seen as a watershed moment for local fund selector polls, at the Expert Investor Iceland held last week in Reykjavik revealed.
The events of recent weeks could lead investors to draw a stark conclusion; there is no such thing as a ‘safe haven’ in investment terms any more.
The majority of global pension funds have been increasing their equity allocation in the past six months. However, many would prefer to decrease it if they could just find yield somewhere else, because they expect a serious market correction.
With the United States’ equities bull-run into its sixth year and valuations looking pretty much up to the brim, investor sentiment has steadily shifted more in favour of European stocks – but should investors really make big cuts to their US allocation?
Barry Norris, the European equity manager and co-founder of London-based investment boutique Argonaut, is one of the most outspoken proponents of a Grexit. The refusal of the current ‘communist’ Greek government to commit to reforms means the country’s economy could never be able to stand on its own feet if it stays in the eurozone,…
