Principal Global Investors' Shah on Record Euro Stocks

The video discusses the challenges and opportunities in the European market, focusing on vaccination rates and economic recovery. It compares investment prospects between the US and Europe, highlighting the attractiveness of the US market. The video also examines emerging markets, emphasizing the need for careful selection due to COVID-19 impacts. It explores cyclicality in the market, noting concerns about complacency and inflation. Finally, it addresses currency trends and hedging strategies, particularly the US dollar's strength against other currencies.

What is a major concern affecting the attractiveness of European equities?

• High inflation rates

• Low vaccination acceptance

• Strong economic growth

• Stable political environment

Why might investors prefer US investments over European ones?

• Europe has better infrastructure

• Europe has higher interest rates

• US is leading global economic recovery

• US has a stronger currency

What is a key factor to consider when investing in emerging markets?

• Political stability

• Low interest rates

• Strong dollar impact

• High inflation

What is a concern for active managers regarding cyclicals?

• Lack of investment opportunities

• Complacency in the market

• Low inflation

• High interest rates

What is a potential risk for the euro against the US dollar?

• Stability due to strong economic growth

• Weakening due to lack of stimulus withdrawal

• Premature tightening by the ECB

• Strengthening due to high inflation

How has the currency story evolved since the beginning of the year?

• The euro has weakened as expected

• The dollar has strengthened unexpectedly

• The euro has strengthened unexpectedly

• The dollar has weakened as expected

What is a strategy to manage currency risk effectively?

• Investing only in domestic markets

• Ignoring currency fluctuations

• Using cross-currency basis analysis

• Relying on historical data