Market Rally Will Slow but US Firms Remain Strong

US equities look expensive, but their marked outperformance of the past three decades may continue, writes Aviva Investors fund manager Giles Parkinson

Aviva Investors 23 October, 2017 | 12:31PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors.

October 31, 1985, was a pivotal date for financial markets. It marked the last time the UK’s FTSE 100 stood above the Dow Jones Industrial Average.

Fast forward to October 16, 2017; the Dow stood at 22,957, while the FTSE trailed at 7,527. This means the Dow has risen 1,570% since the end of October 1985, while the FTSE has gained a comparatively miserly 446%. This begs three questions: to what extent has the US market actually outperformed; what are the reasons for this; and will these factors persist?

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Apple Inc165.32 USD0.00Rating
BP PLC346.50 GBP0.00Rating
Microsoft Corp326.19 USD0.00Rating
Royal Dutch Shell PLC B1,678.40 GBP0.00Rating

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Aviva Investors  is Aviva's global asset management business