Thesis underweight Europe on default worries


Thesis Asset Management has warned of “spectre of defaults” with particular concern about Europe where it remains significantly underweight.

The firm’s highest risk mandate has around 6.2 per cent allocated to Europe, more than half of the 15 per cent in the benchmark.

For lower risk portfolios the allocation is 0.5 per cent compared to 2.2 per cent in the benchmark.

Investment manager Michael Lally says investors should keep an eye on debt as the first indicator of potential storm clouds and warns a “spectre of defaults” in sovereign or banking defaults are on their way.

In particular Lally warns of “financially less disciplined” or politically unstable European countries, singling out Greece.

Lally’s concern is not solely limited to Europe and the veteran investment manager warns he is seeing the “classic indicators” of a market about to correct.

He also raises concerns about defaults in Turkey.