Analysts concur that European stocks are notably more affordable than U.S. equities. For instance, the stocks in the Stoxx Europe 600 are valued at 14 times earnings, while those in the S&P 500 trade at 25 times annual earnings. Michele Morganti, senior equity strategist at Generali Investments, said this significant difference is the largest in over 20 years.
It seems like European equities might now be bucking this trend as they have been slightly outperforming Wall Street this year, with the Euro Stoxx up by 12.4% compared to the S&P 500′s 9.5% since January. However, it’s still early to confirm a trend shift. Over the past year, U.S. stocks have surged twice as much as European stocks. Looking back to the early 2000s, U.S. markets saw a 256% increase, while the Stoxx Europe 600 only rose by 42%.
JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
