One region which has split opinion among allocators in recent times is Europe, where cheap valuations contend with weird politics.

M&G Wealth is among the more bullish voices on the continent, having announced in its June rebalance the team has gone overweight here, in part down to a belief in the resurgence of the European consumer. 

“In Europe, people have more money to spend since energy prices are falling and wages are rising,” they wrote. “Wage growth remains sticky – currently 5.3 a year compared to 2.4 per cent annual inflation."

"This gives people more spending power, which can boost economic activity as we move through 2024 and into 2025.”

They also see the recovery in the global manufacturing sector – a significant driver of EU GDP – as positive for companies in the region. 

Elsewhere they added the ever-popular Fidelity US Index to portfolios, instead of their original FTSE North American tracker. This choice was made to cut Canadian equities from their strategy while homing in on US tech. 

With this, M&G Wealth became the thirteenth holder of the Fidelity mandate, making it by some distance the vehicle of choice for allocators’ North American passive plays.  

Indeed M&G’s optimistic stance on Europe is mirrored also by Robeco. 

Asset Allocator reported last month that they’re seeking to take advantage of election volatility in France, and were particularly pleased with Europe’s solid banking performance. 

Their head of multi-asset, Colin Graham, contrasted this opportunity with the “eye-wateringly high” valuations in areas like US equities and the dollar. 

You can read more about that here.