Why European investor performance trailed the US and Latam
By Jassmyn Goh, 20 Feb 18
The depreciation of the US dollar led to European investors lagging behind their US and Latin American counterparts in terms of performance in 2017 despite making the right call about being overweight European equities, according to Natixis Investment Managers.
Click through the gallery to find out what asset allocation looked like for European, US, and Latin American investors in 2017.
“On a consistent currency basis, European equities outperformed US equities. European investors actually made the right call in being overweight European equities – it’s just that the impact of currency moves reduced their performance in local currency,” the report said.
During 2017, the USD fell heavily against the other major currencies, losing about 12% against the EUR, 9% against GBP, and 4% against the CHF.
The report said that a European investor would have seen gains of just 6% in US equities due to the dollar fall and their US counterpart would have seen gains of over 20%. For European equities, European investors would have seen gains of 10% whereas dollar investors would have seen gains of 25%.