A Democrat victory in November's US election could stall the North American economy, with wider repercussions for world markets, warns Gartmore fund manager Marcus Brookes.
Brookes, deputy of Gartmore's multi-manager operation, told PIMS delegates that a victory for Democrat John Kerry would see the Republicans' programme of tax cuts put on hold, slowing down consumer demand in the US and hitting the world economy.
Brookes said performance in Europe was likely to be lacklustre. He said UK performance will be steady, with no serious concerns about the high levels of debt among UK consumers.
Brookes expects the best growth to occur in Far East including Japan and he does not fear a repeat of the currency problems of the 1990s as foreign reserves were now far stronger than 10 years ago.
He added that given the choice, his funds would hold no bonds but he is forced to include the asset class because of regulatory restrictions.
Brookes said: “There are issues in the US – we are worried about their deficit and the potential that they will raise interest rates and if Kerry gets in, then consumer spending will slow down.
“We like the Far East and Japan in particular. Corporate Asia has learnt the mistakes of the past and corporate governance is getting better.”