Today we speak with Portfolio Manager Matt Siddle as he discusses the impacts of rising interest rates on European consumers, opportunities for-long-term investing in staples, and his investing philosophy. Within the European labour environment, Matt explains to host Bryan Borzykowski, historically low unemployment levels continue to enable wage inflation. In turn, unions continue to push for wage hikes of between 10 and 15 percent to match rising costs. The cost of food has risen by almost 40%, and while the removal of the “fear factor” around gas shortages has caused European markets to rally, the price of petrol and diesel has continued to double, even quadruple, in other countries. The impacts of American regional bank failures and the Credit Suisse banking crisis on European markets has been limited, Matt explains, because of decreased exposure to commercial real estate. Matt also emphasizes that consumer staples remain a significant avenue of opportunity for investors due to their strong pricing power and high returns. When it comes to sourcing ideas, Matt describes the extensive team of analysts and researchers assembled in Europe covering stock recommendations and pitching investment ideas. In addition to the rigorous screening process he deploys to identify the quality of a given business, Matt emphasizes that his goal is to find the profitable opportunities and attractive valuations that are consistent with his investment process.

Recorded on May 18, 2023.

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