View more on these topics

Multi-managers head for Europe exit

Multi-managers are cutting their exposure to Europe amid concerns that the European debt crisis is worsening.

Cazenove head of multi-manager Marcus Brookes says interest rate rises in Germany could have a negative impact on other European economies.

He says: “There is a worry at the European Central Bank that Germany has the potential to overheat, so it is raising interest rates there. That may well weaken the peripheral countries and might kick off another leg of the European debt crisis.”

Brookes has been reducing exposure to the euro and European equities. He says: “We bought an ETF that hedges out of euros and puts that risk into dollars to make sure we are insulated and we do not give away too much of our return if the euro weakens. We have sold down the European equity funds that have got exposure to industrial and cyclical-type names and put that money into US equities. We were two-thirds weighted to Europe relative to the benchmark at the beginning of the year, with our maximum underweight being 50 per cent. We are now getting down to the maximum underweight in Europe.”

Thames River multi-manager Rob Burdett says: “We are trimming our exposure to Europe to less than 1 per cent in the equity and bond funds and by more than 1 per cent in the equities funds and moving it into UK equities. We are a bit worried about the second bailout in Greece.”

But Aberdeen Asset management head of global equities Stephen Docherty says: “We focus on businesses rather than macro-economics because nobody knows what will happen. Europe is not the only area that has a sovereign debt issue.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com