Japan, Europe and broad Asian equity markets are cheap right now, global fund managers from Schroders believe. Marcus Brookes, head of multi-manager funds for Schroders, says they are overweight Japan and Europe in the core economies because compared to the S&P 500 (SPY 515,71 +2,85 +0,56%), Europe looks cheap.
Brookes did not mention any ETFs, but the popular ETF trades for those markets are Vanguard’s FTSE Europe (VGK 66,41 +0,11 +0,17%) and BlackRock’s MSCI Japan (EWJ 70,92 +0,27 +0,38%).
“Europe is one of the last stories that hasn’t played out as much as it should,” Brookes says in a talking point memo put out by the London-based investment firm on Wednesday. “Brexit and its associated worries are among the reasons Europe has struggled and international investors have not been willing to put their money there. There’s always been reason to go elsewhere, particularly U.S. equities, which are now incredibly expensive.”
On Tuesday, CNBC host and emerging market fund manager Tim Seymour of Triogem Asset Management wondered out loud on his Twitter feed why so many American investors hold a passport but are afraid to travel beyond the confines of the S&P.
For the past several weeks, we have pointed out the toppishness in the S&P 500 and that some technical traders were telling us the market still had legs. A minor correction of 10% or even a heftier one at 20% was a time for long termers to set their feet in, and get ready at home plate. The consensus is that a combination of tax cuts, energy security and demographics would help the U.S. long term.
Within the core economies, Europe has been the most neglected as Japan has been a relative favorite all year.
Asia is “cheap”, says Matthew Dobbs, head of global small cap at Schroders. He did not say where. For what it’s worth, none of China’s hot tech companies are cheap. Alibaba (BABA 68,82 -0,79 -1,13%) trades at 49 times earnings.
Dobbs has been an Asia investor for some time, so long term growth trumps price for him.
“It’s worth emphasizing that I don’t invest in Asia; I invest in a very select bunch of stocks in Asia.
As such, I am less obsessed with value than some managers, because I’m quite happy to pay up for a good business model, run by great management,” he says.
One way for broader Asia exposure is through the BLDRS Asia 50 (ADRA 34,64 -0,08 -0,23%) fund, up 7.5% this year and beating VGK and EWJ. 3 Top-Down Value Picks From Schroders
Japan, Europe and broad Asian equity markets are cheap right now, global fund managers from Schroders believe. Marcus Brookes, head of multi-manager funds for Schroders, says they are overweight Japan and Europe in the core economies because compared to the S&P 500 (SPY 515,71 +2,85 +0,56%), Europe looks cheap.
Brookes did not mention any ETFs, but the popular ETF trades for those markets are Vanguard’s FTSE Europe (VGK 66,41 +0,11 +0,17%) and BlackRock’s MSCI Japan (EWJ 70,92 +0,27 +0,38%).
“Europe is one of the last stories that hasn’t played out as much as it should,” Brookes says in a talking point memo put out by the London-based investment firm on Wednesday. “Brexit and its associated worries are among the reasons Europe has struggled and international investors have not been willing to put their money there. There’s always been reason to go elsewhere, particularly U.S. equities, which are now incredibly expensive.”
On Tuesday, CNBC host and emerging market fund manager Tim Seymour of Triogem Asset Management wondered out loud on his Twitter feed why so many American investors hold a passport but are afraid to travel beyond the confines of the S&P.
For the past several weeks, we have pointed out the toppishness in the S&P 500 and that some technical traders were telling us the market still had legs. A minor correction of 10% or even a heftier one at 20% was a time for long termers to set their feet in, and get ready at home plate. The consensus is that a combination of tax cuts, energy security and demographics would help the U.S. long term.
Within the core economies, Europe has been the most neglected as Japan has been a relative favorite all year.
Asia is “cheap”, says Matthew Dobbs, head of global small cap at Schroders. He did not say where. For what it’s worth, none of China’s hot tech companies are cheap. Alibaba (BABA 68,82 -0,79 -1,13%) trades at 49 times earnings.
Dobbs has been an Asia investor for some time, so long term growth trumps price for him.
“It’s worth emphasizing that I don’t invest in Asia; I invest in a very select bunch of stocks in Asia.
As such, I am less obsessed with value than some managers, because I’m quite happy to pay up for a good business model, run by great management,” he says.
One way for broader Asia exposure is through the BLDRS Asia 50 (ADRA 34,64 -0,08 -0,23%) fund, up 7.5% this year and beating VGK and EWJ.