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Feb 06, 2015

Value Across the Pond

Given some recent news, investors seeking diversification outside of Canada may want to consider Europe as a market worth having exposure to.

As a Client Portfolio Manager, Russ draws on his years of experience and professional network to help clients align their portfolio to their goals and objectives. He also serves as a sounding board for broader wealth issues.

Europe represents over 25% of the world's market capitalization, and given some recent news, is a market certainly worth having exposure to. In our January Q1 Outlook Commentary, we alluded to an anticipated QE by the ECB, which in fact was announced late January. Then in early February, the Euro Area PMI numbers were released, with the composite increasing by 1.2 points in January to 52.6, marking the largest one-month move since July 2013.

Europe ex-UK is currently trading at a 14.6 forward P/E, 1.8 P/B, and a 3.1% dividend yield. This compares to the U.S. with a 16.7 P/E, 2.9 P/B, and a 1.7% dividend yield, respectively.

Our International Equity Pool is overweight Europe, with a 60% allocation. For investors seeking diversification outside of Canada, Europe should be part of the mix, not just the US.

If you would like to read our Q1 Outlook Commentary, please contact us at (403) 234-0005 or [email protected].