The fortress of Europe?

GERMANY

Can the resilience of German equity markets continue despite the headwinds still facing the European economy?

While most European stocks plummeted earlier this year amid fears of a sovereign debt crisis in some peripheral countries, the German market remained flat. At the end of May, Madrid’s IBEX index had lost 22% in the year while the German DAX was only down 2.2%, even outperforming the S&P 500 index, which was down 3.9%. As German confidence continues to swell, European fund managers have been taking advantage of this ‘boom’ period, with many heavily weighted to the region. But why has Germany performed so well compared to its eurozone peers and is this outperformance set to continue?...