Bank of America’s latest Global Fund Manager survey found that 48% of managers favour Europe.
Lombard Odier Private Bank’s head of investments, Stéphane Monier, suggests this indicates that it is no longer a contrarian call to overweight its markets.
“We believe Europe looks more attractive than the US or Japan, with a valuation discount largely centred on banks and oil companies, sectors where – in addition to more cyclical firms – we see opportunities,” he says.
“Of course, experience has taught us caution on the region, and much could still go wrong. History shows us that investors traditionally demand some discount for European stocks versus their US counterparts.”
The big winners? Monier hints at a revival in fortunes for the continent’s unloved banks, particularly if the European Central banks finally sees its way to lifting interest rates.
