Insights

Top global fund manager says “Markets are in a bubble”

A fund manager from T. Rowe Price has said that markets are in a bubble. Scott Berg has been selling out of Tesla, due to valuation.
The post Top global fund manager says “Markets are in a bubble” appeared first on The Motley Fool Australia. –

Investor pricking share market bubble

One of the fund managers from global investment outfit, Scott Berg from T. Rowe Price, has said that markets are in a bubble.

What’s the track record of this fund manager?

There are many different opinions out there, so it may be worth paying attention to a fund manager that has performed well.

Scott Berg has important responsibilities for different funds. One of the funds that he is involved with is the T. Rowe Price Global Equity Fund. He took over running the fund in June 2012. Since then, the fund’s net returns have been 19.4% per annum and over the last five years that fund has produced net returns of 19.9% per annum.

It’s a truly globally-focused fund, with 54% of the fund invested in US shares. At the end of February, some of its biggest 10 holdings include: Amazon.com, Alphabet, Alibaba, Evotec, Facebook, Goldman Sachs, Rivian Automotive, Apple and Charles Schwab.

“Markets are in a bubble”

The Australian Financial Review quoted Mr Berg who said that he believes some valuations have gone too far and that markets are in a new bubble.

He had a number of interesting comments about the market:

When I look at retail sentiment, when I look at some of the crazy things going on, when I look at valuations above average, I think that we’re probably somewhere in a bubble but it could be very early and this makes it really tricky to navigate.

We’re far from the peak of a bubble, in my humble estimation. But equally, I think there are a number of bubblicious-type things. And so expect volatility, expect dispersion.

When I look at retail sentiment, when I look at some of the crazy things going on, when I look at valuations above average, I think that we’re probably somewhere in a bubble but it could be very early and this makes it really tricky to navigate.

So what shares are T Rowe looking at?

Not Tesla, he apparently has sold over 90% of the position in Tesla, whilst still being optimistic about the company’s long-term prospects. He’s still positive about the electric vehicle market – as I mentioned, the fund owns a position in Rivian.

Amazon has bought 100,000 electric delivery vehicles from Rivian – showing the level of demand.

There are the shares that I mentioned that earlier in the article that the T Rowe fund owns.

He’s also thinking about growth shares that have been sold off as investors recently in the rotation to value shares.

The AFR quoted Mr Berg, who said:

What excites me about a number of these growth stocks is that it’s actually contrarian to buy Zoom video right now.

If you ask someone what the valuation of Zoom is right now, they are not even looking at it. They just say: ‘Mate, that’s not going to work for you. That was a COVID beneficiary, we’re in a value trade’.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Top global fund manager says “Markets are in a bubble” appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!