Earlier this year BlackRock began guiding clients to Europe at the expense of the US markets, encouraging Europeans to begin bringing money home to buy into the perceived opportunity on this side of the Atlantic. Emily Cheetham, director of ETF Capital Markets at BlackRock, tells IG Investments that nothing has changed in terms of where the keen money is going, just where it is coming from.
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She says that while Europeans still buy more assets based at home, Americans are beginning to shift money from the US into Europe as concerns begin to develop ‘on the horizon’ around President Donald Trump. Cheetham says that the trend is broad-based but there are particular countries that are benefitting most, including Germany and France.
This, Cheetham adds, does not mean that the US is off the table as the US markets will always be a part of a broad-based investment strategy. To this end BlackRock has been following a sector shift in the US. This includes money coming out of cyclicals, such as banks and materials’ companies, and into some ‘alternative strategies’ such as minimum volatility products which have performed well.
Elsewhere, emerging market inflows have not been affected too much by the Brazilian political developments. Cheetham says that clients are buying back into Brazil and, despite some concerns around China, emerging markets generally seem still to be a good place to be.
Finally, inflows continue into gold ETFs. Cheetham says that if an investor has any worries in the markets due to the political concerns in Brazil and the US, then gold remains a safe choice.