Log in
Log in


Market attractiveness: US equities ahead of Europe, fewer government bonds, lower duration

Luxembourg, 17 March 2021 – The global economy is on the road to recovery. China has already accelerated strongly, with the US following closely, while Europeans are taking more time. Consequently, equities therefore remain attractive, particularly from the US. “As regards bonds, we are cutting duration and reducing government bond holdings”, said Carsten Gerlinger, Vice President of Moventum AM.

Purchasing Managers’ Indexes of the manufacturing sectors of the largest economies are all at expansion levels. “Based on the economic recovery in China, which already started in the middle of last year, demand for (industrial) goods has continued to accelerate”, Gerlinger pointed out. “The rest of the world is benefiting from this trend.” A booming industry is also evident in several indicators, such as freight rates, which have almost quadrupled in the past ten months. Steel and oil prices have also more than doubled in part.

Government aid packages are about twice as big as the packages resolved during the 2008/2009 financial crisis. “As soon as vaccination in the industrialised countries is further progressing, the economy will accelerate again”, said Gerlinger. “Pent-up consumer spending will be the driver, there is enough money available.” For 2021, world GDP growth is expected to be between five and six per cent. In the US, it may even be heading towards seven per cent.

Due to faster vaccination progress and the fiscal package in the USA, a relatively stronger dynamic of the US economy is expected in the short term. “The US dollar should also benefit from this tendency”, according to Gerlinger. In addition, the higher yield of long-term US government bonds is more attractive to investors, which is another beneficial factor for the US dollar. “Later in 2021, however, the discussion about a steep rise in US government debt and stronger recovery of the European economy could re-strengthen the euro”, observed Gerlinger.

In terms of portfolio composition, the fundamental overweighting in US equities with an underweighting in European equities should be maintained. Due to the fundamentally positive economic outlook and the more Single-Market orientation, the small and mid-cap segment remains very interesting and is once given higher weighting yet again. The industrial sector, thus also the equity indices in Europe, are cyclical. These cyclical companies, and in all likelihood their share prices, will benefit disproportionately from the economic recovery. European small caps should therefore be assessed positively. “We also see significant catch-up potential for UK equities after Brexit”, Gerlinger noted. “In Europe, we are strengthening the value component even more, while moving our previous underweight in UK equities to neutral.”

In terms of bonds, yields on long-term bonds have risen, mainly due to fears of inflation. As the global economy gains momentum, yields will tend to rise further. “We therefore see increasing interest rate risks, are moving towards a somewhat more defensive position and are cutting duration in the bond sector”, Gerlinger concluded. “Weighting in government bonds will be reduced in favour of an increase in credit weighting.”

Additional information is available at


Moventum S.C.A.
12, rue Eugène Ruppert
L-2453 Luxembourg

Tel.: +352 26154 200



Press contact:

news & numbers GmbH
Bodo Scheffels
Tel.: +49 178 4980733