The FSA Spy market buzz – 9 June 2023
Pictet on AI, DBS has too much money, China’s crackdown on private fund management, Big Tech vs Small Tech, a book recommendation, wisdom from Peter Lynch, advertising and much more.
European equity markets have recovered after a disastrous performance in 2018. The MSCI AC Europe Index has surged 11.22% since the start of the year, retracing some of its post-October losses, but still short of the peak reached in January 2018.
The index plunged 14.22% for the full calendar year, and the FTSE 100 fared little better, dropping 14.07%.
Apart from the blow to investor sentiment exerted by a hawkish US Federal Reserve, which raised interest rates four times and hinted at more hikes to follow, European growth equity funds faced other headwinds.
Corporate earnings disappointed expectations, while an end to political turbulence seemed nowhere in sight.
Brexit confusion, the Italian financial crisis and the strength of wider populist discontent has still not abated, but a more dovish Fed has restored confidence to markets. Whether or not corporate earnings will provide positive surprises will be a focus later in the year.
So, in this precarious environment for equity growth funds, FSA asked Tanvi Kandlur, senior fund analyst at FE Analytics, to compare two European equity funds that emphasise capital growth but are managed with different strategies and styles: the JP Morgan Europe Dynamic ex-UK Fund and the JGF-Jupiter European Growth Fund.
Part of the Mark Allen Group.