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.
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.
This communication is marketing material. The views and opinions contained herein are those of the named author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds.
This document is intended to be for information purposes only and it 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. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy.
The data has been sourced by Schroders and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions.
Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.
Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors.
Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.