The firm thinks a belief in the Federal Reserve’s injection of cash and increased confidence among investors will make the second round of QE work for the US.
Fund manager Tom McGrath says it may sound clever to take a cynical view but he believes more QE will lift global growth so that US corporate earnings and dividends follow, particularly if job creation gets going.
But McGrath expects Europe and the UK to struggle. He was surprised that European small caps performed well this year and says they were helped by a weak euro.
McGrath’s Apollo balanced fund has little exposure to smaller companies and only one European holding, the Ucits III compliant Schroder Gaia Egerton European equity fund, but he has no immediate plans to increase European exposure.