News / BOS Carmignac – The year of Europe? After a decade notably marked by fears of Europe breaking up, could we finally see the region breaking out?

BOS Carmignac – The year of Europe? After a decade notably marked by fears of Europe breaking up, could we finally see the region breaking out?

  • When: 15h40 – 16h10
  • FSMA accredited*: 0,5 points bank (B600 014) + 0,5 points insurances (A700 011)
  • Register here

The year of Europe?

On the economic front, Europe growth trajectory could prove more resilient than the rest of the world. After being late in the recovery, the Next Generation EU plan is finally ramping-up and should sustain the recovery thanks to structural investments. But one should not be complacent: the continent’s dependence on natural gas and semiconductors imports are a concern.

So despite the potential for a solid recovery in domestic demand, consensus appears overly optimistic on near-term growth prospects – even more so given two additional risks which could affect the region: the Chinese slowdown and tighter monetary policies at a time of fading economic momentum.

On the monetary front, the economy still running below potential means Europe is far less exposed to overheating risk. The tightening pace of the monetary policy should be more gradual than in other regions, but the risk of ECB stepping away is real; as such messaging around the forward path post PEPP will be key.

In such an environment – and given that European equities are structurally more tied to cyclical themes – investors should focus on companies that can generate visible earnings growth. Even more so as after a relatively disappointed year for quality/growth stocks, 2022 should see companies which are less dependent on the cycle while enjoying pricing power should fare better than the rest of the market.

Another way to gain exposure to quality European companies selectively is to use a flexible fund investing across European assets. This approach has the advantage of reducing volatility risk and integrates the potential for diversification.

Again with great flexibility as fixed income markets require very strict risk management. The riskiest parts of European fixed income markets are still trading at spreads close to historic lows, which do not offer – as whole – much cushion in case of sell-off.

Speakers FIF 2021

Kevin Thozet, Portfolio Advisor and Member of the Investment Committee  

Kevin joined Carmignac in 2019. He started his career as an English translator and Editor before joining the asset management industry in 2007 as Request For Proposals Manager (RFP) at Axa Investment Managers. In 2011, he joined Edmond de Rothschild Asset Management as Head of the RFP team, before moving to a position of Product Specialist covering Asset Allocation & Sovereign debt portfolios, and finally a position of Head of Product Specialists. Kevin holds a Master’s degree in management from Paris Dauphine University as well as Master’s degree in bilingual journalism from the Paris Sorbonne University. 

*This breakout session is accredited by Edfin vzw. Co-organiser of the Fund Insiders Forum. In order to acquire FSMA credit points, we are required to scan your ticket at the entrance.

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