European Parliament elections: Uncertainty has been priced in

27 May 2019

Matt Siddle, Portfolio Manager, FF European Growth Fund

“In terms of European equities, much of the uncertainty related to the European Parliament elections is already priced in. Separately, investors will continue to closely monitor any development on Brexit. This will impact currency markets and will potentially have ramifications for both UK businesses exporting to the Continent, and European companies trading with the UK if the common market is not maintained. The deadline for Brexit negotiations has been pushed out to 31 October 2019, which has lessened the immediate chance of a no-deal exit from the European Union. European equity markets are experiencing greater than usual uncertainty, with a wide range of potential outcomes for 2019: from a recessionary bear market to a policy-led boom. Our fund is comprised of stocks that are selected on a bottom-up basis on the merits of each company’s fundamental attributes. Investors tend to focus too much on the short term - as such, political volatility within the region is likely to generate opportunities to invest in quality companies with solid balance sheets and historically low attractive valuations, which offer good long-term prospects.”

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