US hedge funds bullish on the Euro

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

I was reminded by the this quote by the legendary Mr Buffet .

The Euro has gone through so much negativity in recent years , with good reason , huge budget deficit and a crippling welfare system. Some changes have been made , not enough in my opinion , deficit need ago be reduced more are social welfare needs to be more appropriate to 21st century . Retirement age increased from 60/65 to 70/75 . People living longer and as such. Benefits needs to reflect that .

With the rate cut and world economy bouncing back Euro will take advantage of this .

As always time will say , but could be worth an allocation.

Tony Evans

US hedge funds bullish on the Euro.

While investor sentiment in Europe remains wary, smart US investors are looking for opportunity in the belief that disaster has been averted.

Over the past two years, US investors have raised money for opportunities in Europe at the right time. Former bears on Europe’s single currency have also been converted. The head of one large hedge fund said recently that he no longer sees a break-up as likely, following the actions of the ECB last year which launched a bond-buying programme designed to save the Euro.

Other US-based investors who last year piled into sovereign debt of southern European countries believe that Europe has not fixed all of its problems, but moves to recapitalise financial institutions and support governments have bought time, which has significant value.

More broadly, sentiment is also high in the US, where the stock market is trading at record highs, and the experience of the American financial crisis and subsequent recovery provides perspective.

Chief investment officer Ray Nolte explained that in the US, investors have some growth to hold on to and things are getting better.

In the early stages of recovery, investors buy broad market exposure and as such, this represents a sign of growing confidence as investors are looking to mid-sized companies for value.

For many hedge funds, some European exposure is sensible and described as a ‘tactical overweight in a diversified portfolio for now. The attraction is that stock markets are cheap, particularly in southern Europe.

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