Rathbones' David Coombs, head of multi-asset, and Mona Shah, senior research analyst, explain why they remain committed to US equities, and explore the prospects for a new group of 'Nifty Fifty' stocks.
Our strategic asset allocation committee has been positive on US equities for over seven years and it remains one of our preferred stockmarkets. Over this time, this position has been challenged frequently, usually on the grounds of valuation and/or economic momentum. Usually, relative valuations are cited as the reason for switching from US to European equities. It is acknowledged that US equities trade at a premium to European equities. From a headline perspective, the MSCI Europe is trading on a forward price to earnings (P/E) ratio of 16.6x versus the S&P 500 on 18.7x, meaning the...
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