Centrist Emmanuel Macron’s victory in the French election is a welcome, if unsurprising development for European markets. He gained nearly double the votes of Le Pen, with 66.1% compared to 33.9%. European investors can now put elevated fears over political uncertainty to rest in 2017.
The German elections in September carry no real threat against the EU; Merkel’s key opponent Martin Schultz is an outspoken EU supporter. Italy has elections most likely in May 2018, but risks here are likely overplayed by investors today. Italy has a completely proportional system, and with the 5 Star Party currently polling 28% of the vote, the odds of a disruptive event are lower than many investors believe. The focus should now be on an event which dwarfs the French election in terms of economic significance; the ECB signalling to investors a tapering of QE.
Important information: Investment risks
Neptune funds may have a high historic volatility rating and past performance is not a guide for future performance. The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. A majority of the investments made by the Fund may be in securities of small and medium sized companies. Such securities may involve a higher degree of risk than would be the case for securities of larger companies. These are Neptune’s views and as such this document is deemed to be impartial research. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. The content of this article is formed from Neptune’s views and we do not undertake to advise you as to any change of our views. Neptune does not give investment advice and only provides information on Neptune products. Please refer to the Prospectus for further details.