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Henderson’s Lofthouse is losing patience with Euro recovery
by Eleanor Lawrie on Jul 07, 2014 at 12:02
On this basis, the fund has added to Reits, including Icade, which invests predominantly in French property.
Although the ECB has paved the way for quantitative easing and a host of other measures to promote growth, underlying countries are not doing enough to secure the recovery, Lofthouse said.
‘We are looking for indications from Europe that they are ready for growth. We have seen the ECB do that, but not governments,’ he added.
Unlike other income funds, Henderson has shied away from utilities, where the fund has only had 3% in the past year, as governments look to win popularity by freezing energy prices.
‘Income funds tend to have more but we do not have a large exposure because there is not a lot of growth there, and as we have seen in Germany, Spain and in the last year in the UK, it has turned out to be quite politically charged,’ he said.
Elsewhere, the manager said what global markets really want to know now is whether the poor GDP data coming out of the US is symptomatic of the terrible weather conditions it experienced earlier in the year, or more fundamental problems.
‘What we are seeing now is how bad that period was,’ he said. ‘The question for markets now is whether we will see a really strong rebound in the second half of the year, and this has muddied the water.’
Although GDP shrank by 2.9% in the first quarter, Lofthouse thinks from a bottom-up perspective, US companies are better positioned for growth than their European counterparts
‘The one [thing] we are really looking out for is what the US does for the rest of the year. There has been some good manufacturing and consumer confidence data. It’s our single biggest country exposure and I think they have more substantial reasons for growth than Europe.’
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As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
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