Europe ahead of the US thanks to rotation

Concise summary of the assessments and allocation results of the Investment Committee of Berenberg Wealth and Asset Management – Transparent insights.

Published: Monthly


  • Pandemic subsides in US and UK, cautious easing also in Eurozone despite mild third wave
  • Biden delivers: rapid progress on vaccines, strong fiscal stimulus, calmer trade policy are good for the world
  • Strong growth from spring onwards, monetary and fiscal policy very expansionary, inflation picking up


  • European equities recently ahead of US counterparts as yields rise. Rapid rise in yields creates volatility
  • Interest rate hikes put growth stocks under pressure and the value rotation continues, but is likely to lose pace
  • We keep a moderate equity overweight and a more cyclical exposure for the time being. Outlook still positive


  • Sell-off in government bonds amid hesitant central banks and good economic data - especially in the US
  • Volatility in spreads increases slightly. EM local currency and EM corporate bonds preferred
  • We underweight bonds and focus on credit risk and off-benchmark themes. Duration: short


  • Gold suffered from selling pressure from investors as real rates rose and temporarily fell below USD1,700 per ounce
  • A restrictive OPEC+, combined with rising demand, provides strong support for the oil price
  • Industrial metals continue to offer potential due to structural drivers, even if much is priced in for the short term


  • EUR/USD with renewed correction. USD benefits from economic stimulus and rapid progress on vaccination
  • The GBP is reaping the benefits of the Brexit agreement and the rapid progress in vaccinations. The exchange rate rises
  • Surprising setback for the chronically strong Swiss franc: The currency falls to its lowest value since mid-2019