Fund selectors dip their toes back into European equities but caution EU foundations remain under 'serious threat'

Several crucial elections

Wealth managers have started increasing their European equity exposure on the back of improving economic data and attractive valuations, but are taking a cautious approach ahead of several crucial elections this year.

After a long period of bearishness towards Europe, many investors are reassessing their stance after the trading bloc reported faster year-on-year GDP growth than the US in the final quarter of 2016, and a 2% increase in headline inflation for February from 1.1% in December, driven by rising commodity prices. Likewise, the European Central Bank's (ECB) commitment to cutting monthly bond purchases from €80bn to €60bn from April has been interpreted by many as the first step in an eventual withdrawal of quantitative easing (QE), indicative of further economic recovery. However, with per...