UK/EUROPE - Fund managers are split on whether European equities will recover over the coming year.
Some believe Europe is heading for the weakest economic recovery outside of Japan, while others say a recovery in the US could trigger one on the Continent.
Isis head of European equities Davina Curling sees “little hope” of an imminent pick-up of European markets.
She said: “This is likely to remain a stock-pickers market and the only way to make progress at such times is by looking at companies on an individual basis and deciding how well their individual attributes serve them in the current environment.”
Threadneedle Investments head of international equities Dominic Rossie concurred. He said earnings assumptions in Europe were on the high side and were not set to come down.
“Our growth rate assumptions for Europe are low, we are in the 1.5% camp – below the current consensus.”
However, Govett Investment European strategy manager Peter Kysel saw reasons to assume recovery for Europe in the short-term.
“Europe will remain reliant on developments in the US.
“Looser fiscal policies being introduced in the US economy will create a better environment for equities.”
But this will not necessarily mean a better environment for bonds, he added.
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