Fund Buyer Trends - In-Depth: US Equities

US EQUITIES INVESTMENT SENTIMENT

Here we take an in-depth look at the attitudes towards US equities, not only showing the pan-European attitudes, but also the country breakdown.

• US equities have been through a real roller-coaster since the crash of 2009. Three years ago they were still much more bought than sold – and remained that way up until the start of 2013.

• In Q2 2013, we got the first warning of a downturn in sentiment. There was a big drop in those looking to buy more and a slight increase in sellers. It continued going downhill, hitting the bottom at the start of 2015.

• Since then we have had two quarters of rising sentiment and the number of those looking to increase their weighting almost matches those wanting to sell off.

• You can see from the bar chart at the bottom that there is substantial variability depending on country. Belgian investors are very optimistic, while investors in Luxembourg are divided – with a lot of buyers and also a lot of sellers.

• Finland and Italy, meanwhile, are the bottom of the table – with a significant % of net sellers.

US EQUITIES STYLE PREFERENCES

• Overall as a continent, there is very little aggregate preference for large cap over small or the reverse. On a country basis, however, the differences are huge.

• Sweden and Belgium are very keen on small-cap US strategies, while Italy and the Netherlands were 100% large cap.

• Growth versus value is the same as large vs small – as a continent, the number of those preferring growth is almost the same as those preferring value (and also almost matched by the number who have no preference).

• But on a country basis, the preferences come out: The Netherlands and Norway stand out for having many more people who prefer value investing in US equities than growth.

• There are only a couple of countries with strong growth preferences overall: Sweden and Finland. The latter is interesting because only about half of the respondents had any preference at all, but of those who did, it was 100% growth.

Source: Expert Investor Europe, 'The Fund Selector Asset Class Report' October 2015