We Are Long European Rates, Says Legal & General’s Roe

The video discusses investment strategies focusing on European rates, highlighting the steep rate curve as a predictor of returns. It explores a contrarian approach to equities, suggesting that unpopular sectors may outperform. The analysis extends to bank exposure, comparing US and European banks, and concludes with opportunities in European markets, particularly in the context of Brexit and UK equities.

What is considered a strong predictor of future returns in European rates?

• Steepness of the rate curve

• Current bond yields

• Economic growth rates

• Central bank policies

Why might investors be interested in European equities according to the contrarian approach?

• They are the most popular investment

• They are generally disliked, which can lead to outperformance

• They are the safest investment

• They have the highest yields

What is the current sentiment towards European banks?

• They are performing poorly but sentiment hasn't fully caught up

• They are performing exceptionally well

• They are the most loved sector

• They are expected to outperform US banks

What is the main reason for staying short on UK gilts?

• Expectation of a softer Brexit and pound rebound

• High inflation rates

• Strong economic growth

• Rising interest rates

How does the potential for a softer Brexit influence UK equity exposure?

• It has no impact on investment decisions

• It results in avoiding all UK equities

• It encourages staying short on gilts

• It leads to increased investment in the Footsie