Investec Wealth & Investment (IW&I) has increased its exposure to European equities three times in nine months, adding 1% point to its medium risk/ balanced mandate discretionary client portfolios, according to Fundweb.
The firm currently has 7 % of its medium risk/ balanced mandate discretionary client portfolios invested in European equities.
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The move follows Investec belief that structural improvements in Europe are under-appreciated and that systemic risk has materially declined.
With the lagging performance of European equities in other equity sectors, the firm considers this as a buy opportunity.
According to the recent figures, the euro area represented a 0.3% growth in GDP, therefore meaning the eurozone has exited the longest recession in its history.
IW&I has reduced its exposure to investment grade corporate bonds by a corresponding 1%, continuing the firm’s underweight stance on fixed income.
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By GlobalDataIW&I chief investment officer Chris Hills says: "It will take a long time to convince many people that the spectre of catastrophic systemic failure in Europe is fully banished.
"This, together with the low valuation of risk assets relative to ‘insurance’ assets such as sovereign bonds creates an investment opportunity of both significant magnitude and duration.
"It is interesting to note that Europe has the best risk reward ratio in developed markets. On measures of normalised earnings, Europe is the least expensive equity market globally. We have focused our attention on where Europe will be in 18 months time.
"Over the past six months we have added to Europe three times, taking a sensible, pragmatic approach to increasing exposure in our backyard," added Hills.
