For fund selectors based in the eurozone periphery, the pace of recovery takes on significant additional meaning as both local and foreign investors wonder if the improvements seen thus far will stick.
VIEWS FROM THE NORTH
Investment professionals in the South may be optimistic, but how do their
colleagues in other parts of Europe assess the recovery in the European
Klaus Wiener, the Cologne based chief economist at Generali Investments Europe, says: “The structural reform efforts of the past should support an ongoing recovery in southern Europe.”
Espen Furnes, senior portfolio manager at Delphi Funds based in Norway gives a mixed picture. “We went quite early into the periphery, predominantly in Spain, the largest, most liquid market, where we increased our exposure in the autumn of 2012.”
Yet he also warns that some sectors, such as technology, have clearly exceeded their potential. Nevertheless, the Delphi European Equity Fund has
a high level of exposure to consumer discretionary, expressing confidence
in a return of consumer spending in the European periphery.
Another company which expresses a strongly positive view on the European periphery is AllianceBernstein. Jorgen Kjaersgaard, head of European Credit
Portfolio Management and John Taylor, portfolio manager multi sector, highlight in particular the opportunities in sovereign bonds.
“Spanish and Italian 30-year bonds in particular offer an attractive yield pickup over German bunds. They’ve also historically been less volatile during periods of crisis than 10-year bonds – a nice insurance policy should market sentiment in Europe deteriorate,” they say.