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03.03.2015 16:50:03

Tailwinds are building for a European equity recovery - News by European Equities Fund Manager James Sym

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Tailwinds are building for a European equity recovery

March 2015

James Sym, Fund Manager, European Equities

European earnings look poised for recovery and economically-sensitive stocks should be the chief beneficiaries.

Valuation no impediment to outperformance
It is clear that European equity valuations have recovered from their crisis levels. The 12-month forward price-to-earnings ratio of the MSCI Europe index is around 14.5 times, which is above its average since 2003. However, though they may not be cheap compared to their own history, European equities continue to look attractive versus other asset classes and other regional equity markets. For that reason, we do not see valuation as an impediment to performance in 2015.

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