Are Your Investments too Europe Focused?

The Eurozone may be starting to fall out of favour with investors as the Global Fund Managers Survey from Bank of America indicates that the US is becoming increasingly attractive.

On this basis, fears that the US market was due for a correction due to being overvalued have faded.

Michael Hartnett of Bank of America says:

"Investors have their eyes on the US this month. With a record high favourable outlook for profits and a return to US equity allocation."

Most investors expect the strong run of the US to continue in the short term, with the majority of those surveyed not expecting the US to have a recession until 2020 at the earliest, with some expecting growth to continue until late 2019.

A peak of between 3001 and 3150 for the S&P 500 was predicted by 25% of respondents, with 50% expecting 3000. The index is currently at 2,771.36 as of the writing of this article.

64% of investors rate the US as the most attractive region in terms of corporate profits, which is the highest figure in 17 years.

A decline in the attractiveness of the Eurozone and emerging markets is one of the drivers in this trend. A rebound in the appetite for technology following the recent scandals involving Facebook that have now died down is another factor.

The largest drop in allocation from global fund managers for the Eurozone since the Brexit vote was recorded, adding to the factors above.

Your financial adviser can help to make sure you are sufficiently diversified and in the right investments that will help you to achieve your long term goals.

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.

Past performance is not a reliable indicator of future performance.

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