Despite the emerging market stock rout, Europe has fund managers more concernedNicholas Spiro says while the slide in Asian tech stocks heightens concerns over emerging market equities, uncertainties in Europe pose a bigger worry
Britain remains the most disliked by equity investors, while Italy’s spat with the euro zone and the end of the Merkel and Draghi era are also causing disquiet
Emerging market equity funds have attracted net inflows of US$13.5 billion so far this year.
This compares with net outflows from European – which includes British – equity funds of more than US$26 billion.
Even US stock funds, which have had to cope with an increasingly volatile American equity market, have attracted inflows, with investors adding US$3.5 billion of new money this year.
Britain remains the most disliked region by equity investors, with a net 27 per cent of fund managers who took part in the survey maintaining an underweight position in UK stocks.
By contrast, fund managers have held an overweight position on emerging markets for all of this year with the exception of two months.
The forward price-to-earnings ratio of euro zone shares currently stands at 12, only 7 per cent below its historical average.
This compares with 10.1 for emerging market stocks, amounting to a 16 per cent discount.
Moreover, European companies’ earnings growth this year is expected to reach just 7 per cent, compared with 13.6 per cent in emerging markets and a whopping 23.5 per cent for S&P 500 companies, data from JPMorgan shows.
Source: SCMP
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"