Jumpstart into 2025

According to the latest Bank of America Fund Manager Survey, European equities are making a comeback, with the second-largest monthly rotation into EU stocks in the past 25 years. This shift follows 17 years of underperformance by Eurozone equities relative to their U.S. counterparts. As we’ve highlighted on numerous occasions, Europe faces significant headwinds, including economic, political, and structural challenges that demand urgent attention to prevent the region from falling further behind. The re-election of Trump, coupled with his "America First" policies—such as new tariff threats and bold investment initiatives (e.g., the Stargate project)—is amplifying the pressure for Europe to act decisively. Despite these challenges, European stock markets are shining. The Euro Stoxx 50 is up 6.3% year-to-date, comfortably outperforming the S&P 500, which has gained 3.5%. This serves as a reminder that stock markets are forward-looking indicators, and the attractive valuations of European equities are proving too compelling to ignore. At European Capital Partners (ECP), we take pride in our strong franchise and a proven track record of over 20 years in identifying undervalued European equities with robust earning power. For us, this resurgence in European equities reinforces our belief in the opportunities the market offers—and we couldn’t be more excited about it.