RoyLon backs Europe for 35% return
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Royal London’s European gro-wth trust manager Kevin Lilley believes the European market has 35 per cent upside excluding dividends to the end of 2011.
Lilley says the market has been held back by issues such as sovereign debt but he believes these are now largely reflected in stock prices.
e says: “I am not saying it is a linear progression but I think the market can continue to move up as there are a lot of negatives that people have been focusing on which have held it back, whether it is sovereign debt risk in Greece or Spain’s austerity measures.”
Lilley’s biggest overweight is Norway at 10 per cent. He halved the fund’s exposure to Spain at the end of January to 6 per cent but in recent weeks has started buying back in through a holding in BBVA Bank and is eyeing up some Greek stocks.
He says: “I only have 1 per cent in the portfolio, I am thinking about buying another. This would take the weighting to 2-2.5 per cent so it is not a massive bet. What is happening in Greece means that GDP growth will be significantly lower than the rest of continental Europe for some time. That is not great for Greek businesses but this is probably more than reflected in prices already.”
Hargreaves Lansdown senior analyst Meera Patel says: “Europe offers good value, especially now that we have had a lot more come out of the woodwork from countries such as Greece. The diversity of countries and companies is enormous.”
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