European equities: Look beyond the headlines to see opportunities

It is a well-known saying in investment circles that asset allocation drives 90% of returns. With this figure in mind, it is relatively easy to see why investors have overlooked European equities for several years.

It is a well-known saying in investment circles that asset allocation drives 90% of returns. With this figure in mind, it is relatively easy to see why investors have overlooked European equities for several years. On the face of it, European equities have been in the doldrums for much of the last decade underperforming the MSCI World index by a not-insignificant 117% over the period, as shown below.   For investors looking to generate returns through asset allocation alone, the lesson, in hindsight, has been an easy one. Any allocation to a European equity index has significantly negat...