Change at AllianceBernstein, Schroders on China, delisting in Shanghai, mean reversion, HSBC’s ESG conumdrum, Vanguard’s flows, ARK vs Energy, Charles Dickens and much more.
Samuel Meakin, Morningstar
There have been better places to invest your money than in European equities over the past decade.
Post-global financial crisis recession, the south European debt bailout, and then sluggish, uneven economic recovery did little to entice investors into the region’s stock markets.
Meanwhile, political paralysis induced by the interminable Brexit soap opera provided another reason to keep away.
The MSCI Europe index has generated a 10-year cumulative return of only 36.66%, compared with 210.75% by the S&P 500, according to FE Fundinfo data.
Even the MSCI World index, which captures the best and the worst of developed market performers, achieved a 120.40% cumulative return.
Of course, most markets took a battering in the first quarter of this year as the Covid-19 outbreak became a pandemic, but comparing relative market returns from 1 January 2010 to 31 December 2019 show a similar disparity.
The S&P 500 gained 256.66% and the MSCI World rose 161.31%, while the MSCI Europe mustered a mere 75.72% increase.
Yet, Europe contains world-class companies whose stocks are represented in the index.
So, while the macro-environment is likely to continue to discourage investors, they might find hope – or at least refuge – in funds which focus on identifying top quality companies and under-valued stocks.
FSA asked Samuel Meakin, a London-based senior analyst at Morningstar, to compare two highly rated European products that have a stock-picking approach: the Eastspring Pan European Fund and the T Rowe Price European Equity Fund.