European equities inhibit a parallel universe according to Gartmore fund manager John Bennett

European equities inhabit something of a parallel universe says John Bennett.

The current environment as one of andlsquo;excellent micro versus poor macro' according to the manager of the Gartmore European Selected Opportunities, SICAV Continental European and SICAV Pan European Funds.

"This two way pull reflects the fact that indebtedness has effectively been transferred from the corporate to the state sector.

Thus we have the tailwind of recovering economies, strong cash flows and low valuations against the headwind of indebtedness to the point of failing states or countries".

"It is anyone's guess as to how the latter plays out".

John's view remains that, barring a domino effect of defaulting sovereigns, European large cap equities are among the cheapest asset classes around.

He contends that the same cannot be said of the mid cap sector whose long term outperformance may soon be drawing to a close.

Both the European Selected Opportunities Fund and the SICAV Continental European Fund are AA rated by Standards and Poors.

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