Cazenove's Brookes: Investors should 'get their teeth into' non-US equities

clock • 2 min read

Investors are better off looking away from the US for their developed market equity exposure, Cazenove Capital multi-manager Marcus Brookes has argued.

Addressing delegates at the Joint Investment Forum, Brookes (pictured) said US companies had become increasingly indebted since the financial crisis, despite the supposed rush to deleverage.

That trend, combined with the fact that the likes of the S&P 500 rose by some 30% in 2013, mean other markets now look more attractive for the manager.

He said: “In the face of the cheap markets of Europe and Japan, I would much rather put my clients’ capital there because if it does go wrong it is a cheaper market.”

Europe’s exit from recession gave investors “something to get their teeth into”, Brookes said, adding Japan’s prime minister Shinzo Abe is determined to put his country back on the world stage.

However, Abenomics could be “in peril” from the prime minister’s opponents within his party, he warned.

Elsewhere, Brookes fended off suggestions that Schroders’ purchase of Cazenove could interfere with his funds' track record: “We well be left alone, and if not we will have to something about it, won’t we?

“I am hoping the only thing that will change will be the name.”

Not all speakers agreed with Brookes’ stance on the US market. Henderson global equity manager Ben Lofthouse said the discovery of shale gas had created a “mini industrial revolution” in the US.

He said the extraction of shale gas had boosted US refiners, in contrast to the struggles of similar UK companies, and also helped boost investment in infrastructure and create jobs.

Cheap energy is also encouraging manufacturers such as Apple to move production back to the US, he added.

Lofthouse also dismissed fears rising interest rates could divert investors away from equities.

He said such an environment would signal improved growth expectations:

“If growth slackens off, then that could be worse for equities than [growth picking up]," he said.

More on Investment

Former CIO of Neil Woodford client Acacia Research charged with insider trading

Former CIO of Neil Woodford client Acacia Research charged with insider trading

Alfred Tobia Jr and sister-in-law

Eve Maddock-Jones
clock 14 January 2025 • 2 min read
Stories of the Week: Surging gilt yields puts pressure on government's debt management

Stories of the Week: Surging gilt yields puts pressure on government's debt management

Government debt, investment trusts, and Saba: The biggest stories from the world of investment and asset management this week

clock 10 January 2025 • 1 min read
REGISTER NOW TO WATCH: Investment Talks 2025: Optimism, disruption, and Trump 2.0

REGISTER NOW TO WATCH: Investment Talks 2025: Optimism, disruption, and Trump 2.0

Join our online event on the 23rd January

Hardeep Tawakley
clock 09 January 2025 • 1 min read
Trustpilot