It’s been decades since the stock markets of Europe and the UK were last as unpopular as they now are with global investors. But as portfolio managers Rasmus Soegaard and Paul Craig explain, that’s exactly why you need to maintain a healthy allocation to both in any long-term growth portfolio.
Back in June, a prominent Wall Street analyst described European equity markets as “uniquely hated”. From a US investor perspective, it’s not hard to see why.
At its heart, Europe is an export economy. Its exports outside of the single-currency zone account for 28% of its GDP – a much bigger slice of the pie than major peers such as the US (12%), Japan (19%) and even China (20%).
As it’s home to the second-oldest workforce on Earth, domestic demand growth in Europe has been waning for years and with a bitter trade war raging between two of its biggest export markets, Europe is caught between a rock and a hard place.