Hugh Hendry's Eclectica fund famously made 31% in 2008, a year that saw US stocks slump by almost 40% as the global credit crunch kicked in. Hendry was also right to say deflation, rather than inflation, would be a key theme in the post-credit-crunch era, and last year raised eyebrows again with a well-timed bet on the dollar. This helped the Eclectica fund gain 28% in the year to June 2015.Now Hendry is eyeing opportunities in Europe.
European monetary policy now suits the troubled periphery, but it is too loose for Germany, he says. And that bodes well for the German housing market. Property isbenefiting from a demographic tailwind, he notes. The population is moving from the east and the countryside to cities and the more populated areas of west Germany. Vacancy rates are low in these areas and "the pressure on the housing stock means prices are finally rising from a low base".
The authorities have exacerbated shortages using "the time-honoured imbecilic policy of rent caps for existing tenants". The upshot is that the next two years are likely to see "another leg higher" for German property, and property stocks offer potential upside of more than 30%.Advertisement
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