Brooks Macdonald invests more in European equity

London-based asset manager Brooks Macdonald has increased its exposure to European equities as part of a slightly changed asset allocation.

The firm said valuations remained “relatively attractive” though political hurdles remained.

Among other changes, the company slightly reduced its exposure to UK equities due to political risk, uncertainty among businesses and consumers, and sterling depreciation.

Brooks Macdonald, which has about £9.932 billion (€11.23 billion) of funds under management, also viewed the US economy as performing well, but said valuations were above historical average levels and a succession of weaker-than-expected economic data had raised questions over its resilience.

However, these disappointments were largely down to high expectations rather than structural declines in the economic backdrop and the firm said that the absolute level of most US economic data remained encouraging.

In a note on its latest asset allocation, Brooks Macdonald’s said the top investment risks were:

  • A Federal Reserve policy error causing global financial conditions to tighten too quickly, potentially causing a credit crunch in the emerging markets
  • A faster slowdown in China’s economy driven by lower credit growth
  • Political events in the Eurozone causing its recovery to stagnate, even questioning the currency bloc’s sustainability
  • Either a political gridlock or the UK’s secession from the European Union having an adverse impact on the UK economy
  • President Trump failing to implement pro-growth policies priced into certain sectors.

©2017 funds europe

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