Europe

Euro a headwind

President proposed tariffs on steel

Since the end of 2007, European equities have underperformed US equities by 63% on a real total return basis (in local currency terms).

Hung parliament most likely result

Asymmetric risk for UK

European equity markets remain attractive to us. The combination of a solid macroeconomic backdrop outside the region and a strong recovery domestically has helped propel earnings higher.

Country goes to polls on 4 March

2017 was another bloodbath for the high street. In the UK alone, more than 8,000 stores closed and a handful of household names, such as Toys R Us, filed for bankruptcy.

Tilting portfolio towards value

2017 marked another strong year for European equities, with the MSCI Europe index providing a total return of 11% and the MSCI Europe ex-UK index providing a total return of 12% in euro terms.