A changing landscape for investors in Europe

Since the 2008 global financial crisis. Consequently, the American equity market has become more and more dominant, which does not leave much room for the rest of the world. Similarly,

It is an exciting period to invest in European actions. Therefore, Since the 2008 global financial crisis. Therefore, the American equity market has become more and more dominant – it represents 71% of the MSCI global index¹ – Which does not leave much room for the rest of the world.

But we believe that. Additionally, Therefore, for a certain number of reasons, we are entering a period when these enormous world capital flows to the United States could start to dissipate, and this trend could benefit from other markets, including Europe and Asia.

The Trump administration clearly indicated that it did not consider the important deficit. In addition, surplus of the United changing landscape investors europe States capital account as beneficial to the country. Therefore, With the pricing reset of the administration. Furthermore, its range of other economic policies, they seek to reduce the concentration of world capital in the United States while increasing national manufacturing capacity in key industries.

Of course. For example, American government policies are unpredictable, but we see the potential for a change in economic order that could benefit European actions. History tells us that this type of capital migration does not last a year or two, but much longer.

Important discounts

We remain optimistic about the American economy. which should remain dominant thanks to assets such as technological innovation, energy independence and uncompromising regulations. But we believe that a structural change is essential and that European actions have been overlooked for too long. This asset class has world class companies in many sectors, which are negotiated at historically low prices.

changing landscape investors europe

Two interesting facts concerning European actions. diversification: less than half of the income generated by European companies listed on the stock market comes from the region, which highlights the global nature of these companies. In addition. market concentration is less pronounced in Europe: the 10 main components of MSCI Europe represent 21% of the market capitalization of the index, against 37% for the S&P 500.²

The best yields

Europe. as a region and continent, consists of around thirty different countries, whose economic prospects and performance can be very different. For example. Germany and the United Kingdom recently experienced difficulties, while the economies of certain Nordic countries have experienced regular growth. We believe that the prospects are also good in the countries of southern Europe such as Spain. Portugal and, to a lesser extent, Italy.

These countries have abundant and inexpensive energy. Spain has large solar and wind resources, and changing landscape investors europe the Nordic countries have hydroelectric and wind resources. They are competitive worldwide with regard to energy prices.

South Europe is also close to the end of twenty years of deleveraging. so that the debt of consumers is low, that the banking sector is healthy and favorable to expansion and that even the immigration patterns are positive.

We appreciate a number of sectors in the region, including semiconductors and investment equipment in semiconductors. They are exposed. such as American technological companies, to AI, customer IT, VE and other areas of growth, and they are cheap compared to history and seven magnificent Americans (Apple, Microsoft, Nvidia, etc.).

Banks and redemptions

We are also positive with regard to certain European banks. They are valued in an attractive way compared to their past. generate good yields for shareholders in the form of dividends and redemptions. Financial values represent the other end of the changing landscape investors europe growth/value range compared to technological values. We consider ourselves agnostic with regard to styles of growth. value, and sufficiently agile to change when the conditions require it.

There are also a series of particular companies that we find interesting. in particular some good companies in the construction sector and building materials, which come out of a period of low activity to enter a period of potential growth. We also have a European airline. which is a world leader in the performance of invested capital and available cash flow, and we appreciate a number of companies in the distribution and consumption sector, which are world leaders in their sector.

We believe that an allocation to European actions should constitute a significant part of any well -diverse investment portfolio. They can offer diversification and exhibition to competitive companies worldwide to attractive valuations. While the United States has dominated global equity markets in changing landscape investors europe recent years. we believe that structural changes in trade, capital allowance and government policy support a movement to Europe that should have occurred a long time ago.

¹ MSCI World Index (USD) factsheet, 30 April 2025. US 71%, Japan 5,7%, UK 3,8%, France 2,9%.

² Jupiter, Feb. 2025