Close to half of the audience of fund selectors assembled in Lisbon believed financial markets underestimate the risk of Greece leaving the eurozone (though at the same time only a quarter thought a Grexit would actually happen.
“If some complacency has come into the market we are probably guilty of it as well,” admitted
Richard Brown, a European equity manager for Henderson. However, all four fund managers attending the event far from fear a Grexit, and would welcome any market turmoil around it.
“I would see that as an opportunity to invest more money into equities we like,” Brown said. He was joined by Louise Kernohan, another European equity manager, but of Aberdeen AM. “We would use the ensuing market volatility to buy companies on the cheap,” she said.
Delegates seemed to agree with the equity managers, as most are not planning to sell equities in case of a Grexit, do many think bonds will be affected (see bar chart below).
Thomas Schäfer, an investment specialist for MFS Investment Management, acknowledged that markets were not currently pricing in a Grexit, despite the market correction of the past
couple of weeks. “But the impact of a Grexit will be very short term and would make the rest of the eurozone more stable,” he said. “I hope Syriza will get their act together, but if you listen to Mr Varoufakis on a daily basis you can get quite sick of him after a while.”
So seemed the majority of the audience, as 61% of them do not
want to give Greece another helping hand (see chart on the right). Considering the Portuguese have gone through significant Trojka-imposed austerity themselves and successfully exited their own bail-out programme a year ago, this shouldn’t come as a surprise though.