Merryn Talks Money The Fiscal Shift That Means You Must Own Europe
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May 16, 2025 Sarah Ketterer, CEO of Causeway Capital Management, leads a firm managing over $55 billion and is a seasoned veteran in global investing. She discusses the shift in focus from the U.S. market to opportunities in Europe, Japan, and South Korea. Ketterer highlights the rationality of value investing in the face of market volatility and changing interest rates. She also delves into undervalued assets in South Korea, particularly in tech and commodities, and contrasts the appeal of Bitcoin with gold in the evolving investment landscape.
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Why U.S. Stocks Rebounded
- The U.S. stock market has rebounded to pre-turmoil levels despite high valuations and uncertainty.
- This is driven by abundant credit and continuing investment needs, especially from an aging population.
Interest Rates Favor Value Stocks
- Rising interest rates shift investor preference from growth to value stocks.
- Higher discount rates cap valuation multiples, making value stocks more attractive now.
Diversify Beyond the U.S.
- Diversify investments outside the U.S. to capture undervalued international equities.
- The weakening U.S. dollar and broken U.S. market dominance encourage this shift.
