PSigma's Abate: Dollar to prosper as Greek situation spreads

NORTH AMERICA

The impact from Greece's fiscal crisis on the euro (and related concerns about sterling) has led to a stronger dollar boosting returns for non-dollar based investors in US funds.

Over the past two years ending April, the S&P 500 Index has outperformed the FTSE 100 Index. In addition, it has suffered a substantially lower maximum drawdown in sterling terms. Despite this, UK advisers remain underweight significantly the US in global portfolios relative to the US’s economic size or market capitalisation in the world. We see this changing as the dynamism of the US leads investors to reverse underweight positions. Our continued stock market optimism rests mainly on the fact the economy is recovering without igniting inflation and, most importantly, the benefits fro...