A year ago, amid widespread scepticism, we argued for a renaissance in Europe. In 2017, the eurozone recorded its fastest rate of economic growth in a decade, confidence soared and stocks rallied. Today, Martin Todd, Co-Manager, Hermes European Alpha at Hermes Investment Management, revisits the case for European equities and asks: is the future still bright for the region?
Europe entered 2017 against a backdrop of political uncertainty. Many investors feared anti-establishment electoral threats as the region braced for a slew of high-stake elections in the UK, Germany, the Netherlands and France.
At the same time, we argued in favour of European equities in our commentary, “Why European equities?” The central premise was that the market provided attractive opportunities given that negative sentiment overshadowed the region. We also highlighted that companies are not the economy or the politics of any nation.