Swiss jump on European QE wave
Swiss fund buyers are some of Europe’s most bullish investors, and are becoming more enthusiastic about European equities by the quarter.
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Swiss fund buyers are some of Europe’s most bullish investors, and are becoming more enthusiastic about European equities by the quarter.
In these times of great macroeconomic uncertainty, Munich’s fund selectors are looking for a hiding place in Europe, a more popular investment destination than ever before.
The Great Rotation from emerging markets to developed market equities is now in full swing: while investors pulled out a record €7.1bn from global emerging market equities in July, net inflows into their developed market equivalents were at their highest since February 2014.
Consider the following: you come together with your investment committee, look at macroeconomic fundamentals, GDP growth trends and companies’ earnings forecasts, and you come to the conclusion that European equities are far more attractive than stocks elsewhere. However, you and your colleagues also agree that, with a rate hike in the US this year ever…
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.
European investors appear to have shrugged off their worries about a Grexit, with the Euro Stoxx 50 index up 2.4% on Monday. Indeed, the consensus that European stocks are the place to be has returned, also among the continent’s fund buyers.
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 leading European equities indices have jumped this morning as reports emerge indicating a deal has been reached to offer Greece a new bailout and keep it in the eurozone.
Germany’s finance minister Wolfgang Schäuble put the question to the Greek government during negotiations, according to a senior member of Greece’s negotiating team.
The launch of the ECB’s bond-buying programme has led to a convergence in net inflows into investment grade bonds and European equities, an analysis of recent Morningstar fund flows data shows.
Despite the possibly devastating consequences of a Grexit on European equities, asset management companies’ confidence in the asset class remains at record levels, according to the latest EIE Fund Manager Sentiment survey.
Markets around the world have once again been spooked by Greece as the European Central Bank limited funding over the weekend and capital controls were imposed.