Is Europe Set for a Big 2018?

According to some professional investors, Europe will provide one of the focal areas for investors in 2018 as the Eurozone powers ahead of Britain & the US (Sam Brodbeck, Telegraph, January 2018).

Roy Powe of the £1.2 billion Man GLG Continental European Growth fund asserts that Brexit has made the EU stronger.

A general consensus amongst many fund managers that Europe's prospects are improving is due to the improved performance of the Eurozone economies (Sam Brodbeck, Telegraph, January 2018).

The Eurozone economy grew by 2.4% in 2017 and it is generally expected to grow a similar amount in 2018. This level of growth matches that of the US, meaning that the Eurozone is no longer seen as an inferior investment destination from the perspective of growth.

In addition, unemployment is down and earnings growth is accelerating. Despite the factors mentioned above, inflation is not rising quickly.

According to Roy Powe, Brexit has not had a major impact on the investments held within their fund due to the size of the UK market compared with the global investment environment.

In addition, Brexit has helped to drive the EU to move forward with changes which may be beneficial for EU based companies in the long term.

The reliance of financial firms on interest rates and that of retail firms on a European market that still has high unemployment and internet savvy consumers are two factors that could affect their underlying sectors in the future according to Rory Powe.

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The value of investments and income from them may go down as well as up and you may not get back the original amount invested.

Information is based on our current understanding of taxation legislation and regulations which is subject to change.