60 seconds on where's the value in European equities?
In European equities this cycle, value versus growth has really been the key debate.
Of course, growth has been the pre-eminent style in this world of quantitative easing and zero interest rates. Logically, in the second half of 2019, I would expect that to start to fade.
The reason for that is we are starting at such an extreme level. So I can now stand in front of you and say value has never been cheaper relative to growth, including in the TMT bubble.
What sort of sectors might that include, we overweight financials, one smaller sector that we think is a really good investment opportunity at the moment is the oil services sector. Very unloved, very depressed and we are investing in that sector for the recovery we expect to see. But it is a value sector and it is very out of favour, so if we expect growth to fade in the second half of 2019, that’s the part of the market we should be focusing on.
Any security(s) mentioned above is for illustrative purpose only, not a recommendation to invest or divest.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The views and opinions contained herein are those of the author(s), and do not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. The material is not intended to provide, and should not be relied on for investment advice or recommendation. Opinions stated are matters of judgment, which may change. Information herein is believed to be reliable, but Schroder Investment Management (Hong Kong) Limited does not warrant its completeness or accuracy.
Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should remember that the value of investments can go down as well as up and is not guaranteed. Exchange rate changes may cause the value of the overseas investments to rise or fall. For risks associated with investment in securities in emerging and less developed markets, please refer to the relevant offering document.
The information contained in this document is provided for information purpose only and does not constitute any solicitation and offering of investment products. Potential investors should be aware that such investments involve market risk and should be regarded as long-term investments.
Derivatives carry a high degree of risk and should only be considered by sophisticated investors.
This material, including the website, has not been reviewed by the SFC. Issued by Schroder Investment Management (Hong Kong) Limited.
- Going for gold: why is the ultimate “safe haven” so volatile?
- This is a golden opportunity to show the merits of stock markets
- V, W or L: what shape will the recovery take?
- The impact of the coronavirus on dividends
- How the ageing population could be a boon for investors
- Infographic: A snapshot of the world economy