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Perspective – January 2018

29/01/2018

Didier Bouvignies, General Partner & CIO, and Ludivine de Quincerot, Portfolio Manager & Spokeswoman

More robust and well-balanced growth justifies a reassessment of Eurozone markets

In 2017, the positive dynamic between investments and employment has strengthened and balanced global growth. The Eurozone demonstrated its resilience in overcoming numerous political concerns. In a year of stock-picking, particularly in the Eurozone, with no consistent trend between growth and value strategies, Equity markets performed well, clearly ahead of Fixed Income markets. In the Eurozone, the steep run-up in the common currency made domestic investments more attractive than international ones.

This trend may continue for the upcoming year: while American corporate profits will benefit from the tax reform and European ones from significant productivity efforts, the Fixed Income market could suffer from pressures on production factors and from cuts in liquidity injections. In the Eurozone, the growth environment has been driven by high production and record-high confidence indicators, while the ongoing job creation enables us to anticipate double-digit earnings growth.

In a more appeased political climate, combined with strong M&A momentum, the potential return of equity investors and attractive valuations are strong arguments in favour of the Eurozone.

Our range of funds performed very well in 2017, notably through the good behaviour of our stocks selection. This trend is expected to accelerate in 2018, if the forecasted rate hike and the sector rotation are confirmed.

Read the full analysis in Perspective - January 2018 (PDF)

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