Putnam bullish on US market
Rothschild’s US-based international fund manager Putnam Investments remains bullish on the US share market, despite recent warnings from other managers about overvalued stocks.
Putnam's head of client services Erik Knutzen told a Rothschild briefing yesterday that the fund manager believes the high growth/ low inflation paradigm that has ruled the US economy over the past few years will persist due to continued productivity growth.
"In the past year, productivity in the US has grown by 5.7 per cent and (US Federal Reserve chairman) Alan Greenspan has indicated that we can look forward to 6 per cent growth for the next few years," he says.
Knotzen says the US share market has already factored in slowing growth in the US economy which is likely to fall from 4 per cent this year to 3-3.5 per cent in the coming year.
While Putnam is bullish on the US market, it is bearish on Japan. Knutzen says Japan has the slowest growth of any of the developed nations at about 2 per cent and despite valiant Government attempts to rekindle growth, is looking like it will continue to grow slower than most developed nations.
But as Knutzen explains, Putnam's global view is not restricted to country views. It combines bets on country, sector and individual stocks performance for its global core equity approach used by Rothschild in Australia.
"It is what we call a "no excuses approach". We don't have the excuse of saying we hold growth stocks and it has been a deep value market," Knutzen says.
Sectors Putnam like at the moment are energy, financial services, health care and consumer staples replacing its overweight positions in technology and telecommunications from earlier this year.
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