Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

RWC's Gambhir: European equity valuation dispersions at 30 year high

RWC's Gambhir: European equity valuation dispersions at 30 year high

RWC’s Ajay Gambhir says the dispersions in European equity valuations are at their highest level in 30 years, throwing up opportunities for long/short managers.

Gambhir, who runs the RWC European Absolute Alpha fund, said: ‘The dislocations in European equities have been so severe in the recent past that the opportunity for long/short investors, between sectors and stocks, is greater than it has been for at least five years. 

‘We can see several ways to take advantage today; the dispersion of valuations between European sectors is close to the highest level in three decades, excluding the TMT bubble; the spread of valuations within sectors is higher for the majority of sectors than six years ago before the financial crisis; and 60% of the Eurostoxx index of European stocks has dividend yields higher than the average European BBB corporate bond yield.’

He said although the market is cheap on average, there are many expensive stocks within it which present shorting opportunities. Gambhir is also backing European economic growth to continue improving, albeit with the caveat that it will be capped by continuing austerity, structural issues and ‘global headwinds from the Brics’.

Over one year the  RWC European Absolute Alpha fund has returned 14.02% compared to a City Alternative Ucits Long/Short sector average of 9.79%, both in sterling terms.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter