There’s an old line about those who can see a bandwagon have already missed it. In the case of Europe’s stock markets, which are becoming an exciting investment destination, that’s only partly true.
Investors in Europe are enjoying a rare moment in the sun. The region’s blue-chip stocks have risen 9 per cent this year, while their US peers have fallen almost 4 per cent. Should this outperformance continue, it would make for a historical oddity. Only four times since 2008 has the Euro Stoxx 600 ended December ahead of the S&P 500.
Fund managers are getting interested, though cautiously. Allocations to Eurozone stocks have reached their highest in more than three years, according to Bank of America’s monthly survey. And the charge is being led by solid industrials such as Thyssenkrupp and 136-year-old Rheinmetall, spurred by Germany’s plans to invest up to €1tn in infrastructure and military equipment.