US investors are not quite as fond of European equities as they used to be, but the opportunities for investment remain significant, argued Thomson Reuters in a webinar this week.
James Tickner, global head of targeting, and Lou Cordone, head of advisory services for the Americas, spent just under an hour explaining how Europe’s issuers can go about targeting the right US investors.
There was plenty of useful insight in the webinar – below we pull out five takeaways. All data is from Thomson Reuters.
1. Pullback not overdone: US investors have lowered exposure to European and other international stocks thanks to uncertainty in the global economy. The pool of actively managed equity assets on offer remains considerable, however. In addition, US global and emerging market funds have proved resilient to outflows compared with US domestic funds in 2012.
2. Go West: New York is the most popular location for European roadshows but the West Coast has, in general, longer-term fund managers. The average turnover rate for funds is 22 percent in San Francisco and 29 percent in Los Angeles, compared with 34 percent in Boston and 47 percent in New York (the average for the US as a whole is 35 percent).
3. Regional differences key: around half of the European equity actively managed in the US is found outside the main money centers, but each region has its own investment preferences. The Midwest likes small and mid-caps, for example, while the West Coast favors tech stocks.
4. No big fiscal cliff impact yet: the fiscal cliff is on the minds of US investors but hasn’t caused any significant change in strategy, despite the likelihood that taxes on dividend payments will rise. There is a reluctance to commit capital among income-focused funds, however.
5. Who’s buying?: leaving aside the largest 14 US holders of European stocks, here is a list of the top buyers over the last 12 months: T Rowe Price, TIAA-CREF, JPMorgan Asset Management, Columbia Management Investment Advisers, Jennison Associates, Lazard Asset Management, Morgan Stanley Investment Management, Wells Capital, Eaton Vance and Fisher Investments.
The full webinar can be accessed here.
By Tim Human