Speaking to Portfolio Adviser during the Portfolio Adviser Summer Congress 2015, the manager of the Henderson Global Equity Income Fund believes that a Fed rate hike could boost equities, because the expectation of growth is what drives equities.
“We have to work on the assumption that the Fed is going to raise interest rates because growth is accelerating; we think that because it has been talking about raising rates for some years now but hasn’t done anything because the growth hasn’t been there.”
Lofthouse is also of the opinion that there are still a lot of opportunities for equity investors.
“One of the healthy things about this market is there is still a good deal of valuation dispersion. In the UK, there are big parts of the index trading on cheap valuations because there are uncertainties about the business; but that is how it should be,” he says.
“There are some very interesting trends that are pushing dividend growth outside of economic growth and that is wrong footing some people at the moment, the pace of dividend growth is faster than the pace suggested it should be by economic growth, but that is because there is a lot of structural change happening at the moment.”
