European Companies Who Export Will Thrive

There are still problems in Europe - but those companies who can export in a time of sluggish global growth will do well

Carmignac Gestion 8 August, 2013 | 4:56PM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Sandra Crowl, a member of Carmignac Gestion’s investment committee sets out the asset manager's economic outlook and investment strategy for Q3 2013.

While Fed chairman Bernanke’s policy turnaround took markets by surprise, coming only two months after he confirmed the benefits of accommodative monetary policy for the global economy, we feel that there is a good case for some QE tapering starting in September. With less fiscal drag, the economy will be on a much sounder footing.

Continued abundant issuance of high yield covenant-lite corporate bonds is something the Fed would very much like to avoid. The bumpy road to rate normalisation may also be accelerated by the much publicised end to the Bernanke era in early 2014. In the meantime, volatility will rise as markets anticipate the Fed’s reading of the economy and long term rates will grind higher ending the spectacular 20 year bull run of the US bond market.

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Carmignac Gestion  Founded in 1989 by Edouard Carmignac, Carmignac Gestion is one of the leading asset management companies in Europe today. It launched a UK business in 2012.