Osakkeissa paino USA:ssa vai Euroopassa?

VIDEO: Old Mutualin salkunhoitajan mielestä Eurooppa näyttää selvästi houkuttelevammalta kohteelta kuin Yhdysvallat juuri nyt. Miksi?

Emma Wall 16.03.2015
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Emma Wall: Hello and welcome to the Morningstar series, Why Should I Invest With You? I am Emma Wall and here with me today is Lee Freeman Shor, manager of the Old Mutual Global Best Ideas Fund.

Hello, Lee.

Lee Freeman-Shor: Good morning.

Wall: So I thought we'd start with the U.S. because we've had a quite a big correction in the U.S. is sort of lost all the gains that it made so far this year, although this year is only two and a bit months old, so perhaps not the end of the world. Is this the beginning of the end for the U.S. stock market, do you think?

Freeman-Shor: It's a good question. I think if you look at the U.S., it's had a fantastic run over the last three years, in particular, significantly outperforming most markets globally. The U.S. dollars also had a tailwind.

But one thing that is pretty obvious observation is that the U.S. every time it's had QE, during the three QE programs it has had, the market has rallied. And when QE has ended, the market is sort of like done not much as the market participants try to digest what the future holds.

And I think looking at the U.S. now, one thing is very clear that the market is expensive relative to other markets. It's traveled a long way. And it doesn't surprise me that money is beginning to flow into other areas like Europe and emerging markets, which on the face of it look far more attractive.

Wall: Let's flip it then and talk about where that money is going. Europe has had significant headlines over the last year. Do you think that enough has been done to stabilise those economies and indeed boost those stock markets?

Freeman-Shor: I think the very positive thing for Europe is that you've got Mario Draghi at the helm, an Italian who back in 2012 said he'd do whatever it takes. And finally this week he has started QE.

And going back to the U.S., which we talked about earlier, one thing we know is wherever QE has been done, it has led to asset price inflation. So the U.S. stock market has done well, the U.K. stock market has done well. So this bodes very well, I think, for the European stock markets.

In terms of the economy, I mean that's a slightly different sort of question. I mean, obviously there are some headwinds. I mean we know that credit channels are broken, banks aren't lending. That's an issue and it needs to be dealt with. In the longer term, reforms have to take place in France and Italy. In the longer term, if Europe isn't going to end up like Japan, which is the fear, and which is why German bunds are trading at less than 30 basis points and lower than Japan.

So longer term there are still question marks. Shorter-term, the QE has put, if you like, a put up the market; markets are up over 15% in Europe this year. It looks very well. I mean Europe is an exporting economy. A cheaper euro is good for European business as a whole. We've had oil prices, obviously, coming down significantly over the last year. That will put more money into the consumer's pockets, which should help the European economy as well.

So I think Europe, there are lots of positive things happening in the near term. Longer-term some headwinds and there are structural reforms being taking place. In the short-term, there are still headwinds as well, which could knock at least sentiment temporarily, such as Greece or Ukraine or elections in the U.K. and Spain. But I think looking globally where would you invest right now, Europe looks very attractive with QE happening, which we should underwrite markets and if history does rhyme then Europe looks pretty attractive.

Wall: Lee, thank you very much.

Freeman-Shor: Thank you.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

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