Liam Goodbrand

Investors haven't been as positive on European and UK companies over the last few years compared to US companies when looking at their ability to grow. We feel that narrative is starting to change in that while America's economic growth has been exceptional over the past five years, the profitability of its equity market has not been much better than Europe's.

Investors seem to be stuck in the 2010s' paradigm. In the US, economic uncertainty brought about by Trump's policies have reversed the surge in "animal spirits" (the emotional factors that influence behaviour and decision-making) that followed the US election. Couple that with household savings rates being depleted, disposable income growth after inflation slowing and the valuations that US stocks trade on relative to their European peers still being historically high.

Ultimately, when looking at where we place client's money in the market, we have to focus on what the data is telling us. That is why we believe that a diversified portfolio with exposure across regions and more importantly, across different sectors within those regions leads to smoother returns over the long term and avoids being concentrated into what's doing well today but may not do well tomorrow.

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