60 seconds on three reasons for optimism about European credit in 2015
In the latest 60 second video, European and UK fixed income manager Mike Scott reveals the three factors behind his optimistic outlook for European credit for the remainder of 2015.
4 June 2015
For the rest of 2015 we continue to have a positive view on European credit markets, which is driven by three factors:
- Economic growth is on an improving trend
- Inflation is bottoming out and should increase from this point
- The European Central Bank monetary policy will remain highly accommodative well into 2016
This means that the number of companies defaulting on their debts should remain low.
European and US credit markets diverging
We think company management teams will continue to remain bond-holder friendly.
They are not indulging in the same level of mergers and acquisitions that we have seen in the US, nor are they increasing dividends at the same rate as companies in the US.
Overall, we are seeing a divergence in credit quality between the two markets and that is the reason why we continue to prefer European credit.
Important Information: The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.