As a result of the ECB’s measures, a liquidity crisis among European banks is not a topic any more. For valuation reasons, we continue to regard equities as attractive.…..
Easing of tension regarding Italian and Spanish government bonds
Despite investors’ higher risk propensity, which usually signals a possible consolidation, we feel slightly positive towards equities. Especially thanks to central banks’ very expansive monetary policy, markets should tend to rise further. Within the equity strategy, Europe, the USA and emerging markets are being overweighted, Asia and Japan underweighted. In view of the demanding economic environment, we continue to be reserved towards small caps.
The support measures are also a reason why we have largely abandoned our scepticism towards Italian and Spanish government bonds. We regard the high yield segment as attractive, because many companies should survive a mild recession without major defaults.
Regarding currencies, we are maintaining our small overweight in USD against the CHF. The US currency is undervalued, has a minor interest advantage and is considered a safe haven as long as the Swiss National Bank defends the lower limit of CHF 1.20 against the EUR. Our positive opinion about the Scandinavian currencies NOK, SEK and DKK remains unchanged.
Source: ETFWorld – Swisscanto (Thomas Härter – Head of Investment Strategy)