Confidence in European markets is soaring as investors channel billions into equities, reinforcing the region’s strong performance against the U.S. market. Bank of America reports the highest inflows since early 2022, signalling renewed enthusiasm for European opportunities.
According to EPFR data cited by Bank of America, European equities saw an inflow of $4.1 billion in the week leading to Wednesday, marking the largest since Russia’s invasion of Ukraine. Over the past four weeks, total inflows hit $12 billion, the highest level since August 2015. This substantial commitment underlines a broader trend of investor appetite for international markets.
Bank of America strategist Michael Hartnett dubbed this period the “Year of International,” advocating for long positions in both China and the EU. His bullish outlook reflects a shift away from U.S. dominance, as global investors diversify their portfolios.
Overall, equity funds attracted a staggering $22.9 billion in inflows. U.S. equities accounted for $8.5 billion, while emerging markets pulled in $2.4 billion. Technology funds, which have struggled recently, received $2.6 billion in fresh capital—breaking a five-week outflow streak. The Nasdaq’s more than 10% decline from its December peak has confirmed a correction, leading BofA’s Hartnett to rebrand the once-dominant “Magnificent 7” U.S. tech giants as the “Lagnificent 7,” acknowledging their recent underperformance.
Bond markets also saw strong inflows, with $12 billion entering bond funds. However, U.S. Treasuries suffered a setback, with $1.2 billion exiting—marking their biggest outflow in 11 weeks.
Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.
