So, Where Are the Bets?
A quick survey of representative global equity managers indicates that they have moved to an overweight position in U.K. equities, and are now underweight Europe ex U.K.
Europe
Is the `Small Company Effect` Reasserting Itself?
After a decade of meager returns, U.K. small-cap equities have enjoyed a reversal of fortune in the past two years, rewarding investors that have tolerated the higher risks and lower liquidity associated with this sector. Although relatively attractive on a valuation basis, U.K. small-caps remain very much a cyclical play, vulnerable—as always—to any significant deterioration…
European Valuations
Our dividend discount model indicates that U.K. equities are now fairly valued, while continental European equities are slightly undervalued.
European High-Yield Market
Economic integration, the trend of deregulation and privatization, surging M&A activity, and the increasing acceptance of leverage in corporate financing have provided the catalyst for an expanding European high-yield market.
European Venture Capital
An assessment of the opportunities and risks in the venture capital industry in the U.K. and continental Europe using the following criteria: economic environment, cultural attitudes, deal flow, investment skill, management pool, regulatory environment, capital availability, technology breakthroughs, and availability/liquidity of IPO markets.