BlackRock's Marchioni Sees Tilt to Banks, Defense in Europe

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00:00Europe is more of a value tilt. So if we think about banks, good profitability, yet still cheap,

00:06or more domestically tilted sectors such as the fence industrial. So again, either sectoral plays

00:14or partnership with active managers that can select, I think will be a good way forward.

00:19And do you think, do you see data or talk to investors and get the impression that investors

00:25internationally are pulling out of the United States? Well, they're still happy to be in the

00:28U.S. They just want to hedge those positions in a way that maybe they weren't previously.

00:32I think that's a brilliant question. So if I look just as exchange traded products, and again,

00:37we should look at active funds as well. But to give you a sense, we've seen 71 billion flowing into

00:42European equities this year vis-a-vis last year's seven. So there's a 10 factor, an order of magnitude

00:49of difference. So it's clearly coming and the repatriation trade is in flux. Since August,

00:55we've seen some return of interest from European investors towards your U.S. equities. But as

01:01you pointed out, it's more towards hedge share classes or areas where the FX element is less

01:09pronounced. So I think this theme will continue to play out and will make big changes in portfolios.