Investing in Europe: Sink of Swim?

Eminent fund managers discuss the value of European shares in the current environment and the impact of the U.S. downgrade and Asian growth Editors 6 September, 2011 | 12:51PM
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Sovereign debt crises, fiscal austerity pressures, bank funding concerns, sluggish credit growth, market volatility, political struggles, civil unrest – you name it, Europe’s got it. Industry surveys show that even after Washington’s difficult summer, Europe remains the least favourite investment destination for global fund managers. In reality, however, only a fraction of companies listed on EU exchanges derive their profits from the domestic economies. Instead they have been expanding their footprint in the emerging markets.

Equity investors could benefit from having their eyes peeled for companies that are able to tap into the relative strength of the emerging markets but have seen their share prices fall on European bourses. Take Standard Chartered (STAN), for example, whose footprint spreads across Asia, Africa and the Middle East but whose share price currently trades almost 30% below Morningstar’s fair value. In such a context, market volatility such as that which we have seen throughout August and early September could give rise to opportunities rather than concerns.

James Bristow of BlackRock is just one of the fund managers Morningstar approached in order to build a nuanced view on investing in the current economic climate. In his interview, Bristow takes a global look a the investing environment and pinpoints investing opportunities in Europe. Compiled below is a list of our manager interviews on the topics of the current relative appeal of equities in Europe, the outlook for the EU economies, and the impact of external factors such as the U.S. sovereign debt downgrade and growth in Asia. Click on the titles to watch the interviews and read the transcripts in Morningstar’s Video Centre.

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About Author Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.

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