The European catch up

For over a decade, US equities have left Europe far behind. Since 2010, the S&P 500 is up 616% in USD, while MSCI Europe returned just 221% in EUR. Even over the past 10 years: +235% vs. +75%.

Valuations followed the same path. The S&P 500’s P/E rose from 18.3x to 25.5x (+39%), while MSCI Europe’s fell slightly from 18.2x to 16.9x (–7%).

As the chart below shows (source: Robeco, LSEG, MSCI), market leadership shifts in cycles. After years of US dominance — especially in Big Tech — 2025 may mark a turning point: European equities are starting to outperform.

Mr. Market loves strong narratives — and today, “the end of US exceptionalism” is gaining traction. At ECP, we stay humble. We look for undervalued earning power wherever it is — regardless of market cap or geography.

That said, US leadership — particularly in tech — may have gone too far. Europe might just have some catching up to do.