Investors' misplaced belief that US stocks are overvalued has made it the "most unloved bull market" in 40 years, veteran US fund manager Ed Cowart has said.
Cowart, managing director of US house Eagle Asset Management who runs the Nordea 1 North American All Cap Fund, dismissed the idea US stocks are overvalued. Instead, he said strong corporate profits and rising earnings will continue to support growth.
He said: “Based on our time in the investment business, this is the most unloved bull market we ever have seen.
"There are many underinvested and underperforming investors today who would like nothing better than a pullback to enable them to do what they should have done several years ago – invest in equities.”
S&P 500 earnings have more than doubled in four years, Cowart said, while corporate profits have “never been better”.
Other factors contributing to growth include house prices, increased employment levels and consumer spending, he said.
Nordea launched its North American All Cap Fund in May 2012. In the year to 14 January 2014, it has seen returns of 33.5%, compared to an average of 25.4% for North American equities, according to FE.
According to the latest minutes of the Federal Open Market Committee, the Federal Reserve has raised its economic growth forecast, and expects the unemployment rate to gradually decline.
