According to professional investors from pension, investment and hedge funds, European equities have the best prospects of outperforming the global equity market. US stocks in particular have tended to perform best for a long time, but this may be coming to an end. Private investors are also increasingly looking for shares from Europe, as a new infographic from Block-Builders.de shows.
Just this spring, professional investors were still of the opinion that US stocks offered the highest prospective returns, yet the tide has now turned, according to data from a Citigroup survey.
As the infographic shows, market observers also give grounds for optimism: Europe offers more investment opportunities in value stocks and cyclical investments, assets that stand to benefit the most from a global economic recovery. On top of that, European equities are also less susceptible to market concerns about inflation.
However it is not only professional investors that seem to see a bright future in European equities. A look at Google search engine data reveals a Google Trend Score of just 6 for the term pair “US stocks”, whereas the score for “European stocks” currently stands at 59. The score is an indication of relative search volume, with 100 representing the highest possible search volume.
Looking back, however, US stocks did perform better last year. The NASDAQ gained 40.9% in a 365-day review, while the Dow Jones gained 32.2%. By comparison, the EURONEXT 100 was up 29.1%. That said, the tide may soon turn, according to assessments by stock market experts, referred to at the beginning of this article.
In terms of climate ranking, EU indices are already on the winner’s podium – although the leading indices from Germany, France and Italy also have a lot of room for improvement, they are clearly ahead of the major indices from the other G7 countries in terms of their climate paths. It remains to be seen whether this will yield higher returns in the future, but there is evidence to suggest that it will.