It’s hardly surprising that stocks are currently taking a breather, according to Barclays, given stretched market technicals/sentiment. But overall positioning is not over-extended and bullishness is not widespread outside of Wall Street and the tech sector, suggesting there’s room for European equities to outperform.
Regional equity flows remain heavily tilted towards the U.S., analysts at Barclays noted, despite long U.S. dollars positions being trimmed. In Europe, equities are outperforming year-to-date, but are still not getting much bid despite the relative economic surprises starting to improve for the region.
“There is thus catch-up potential for Europe if cyclical sentiment continues to improve,” Barclays added.
Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.
